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Saudi Arabia’s Jazan Attracts over $8Bn in New Investments

Jazan City for Basic and Transformational Industries (Jubail and Yanbu Company)
Jazan City for Basic and Transformational Industries (Jubail and Yanbu Company)
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Saudi Arabia’s Jazan Attracts over $8Bn in New Investments

Jazan City for Basic and Transformational Industries (Jubail and Yanbu Company)
Jazan City for Basic and Transformational Industries (Jubail and Yanbu Company)

The two-day Jazan Investment Forum 2023, held in the Jazan region in southwest Saudi Arabia, witnessed the signing of agreements and memoranda of understanding exceeding $8 billion dollars on its first day.

This event, sponsored by Crown Prince Mohammed bin Salman, sheds light on the investment climate in the region and promotes promising opportunities.

Prince Mohammed bin Nasser, Emir of Jazan region, inaugurated on Wednesday the activities of the forum.

He declared that “the forum aligns with the wise leadership’s support for the region’s development and its rapid qualitative leap in projects, bolstered by major initiatives and investment incentives.”

Prince Mohammed emphasized the logistical role of the Jazan City port for basic and transformational industries, serving as an economic icon by supporting factories and projects in Jazan.

He stated that one of the city’s features is that it witnessed the export of the first commercial shipment of locally manufactured alloy steel to the US.

Prince Mohammed also pointed out that the new King Abdullah International Airport will be completed by the end of 2024.

He also reviewed the projects of the Public Investment Fund (PIF) such as the Saudi Coffee Company, Saudi Downtown Company, and the Red Sea Global Company.

These initiatives underscore the region’s commitment to economic diversification and sustainable growth.

Moreover, Saudi Arabian Oil Co. (Saudi Aramco) is investing more than SAR90 billion in Jazan region, according to Downstream President Mohammed Al-Qahtani.

In his speech at the forum, Al-Qahtani stated that the most prominent of these investments include the development of infrastructure for Jazan City for Primary and Downstream Industries, and the establishment of Jazan refinery, one of the world’s largest refining projects, to process more than 400,000 barrels per day of oil, as well as a power plant.

The integrated Jazan Refinery and Petrochemical Complex will produce vanadium concentrate, a metal associated with the clean energy industry sector, he added.

The company also began exporting diversified and high-value products, ranging from gasoline, diesel, and chemicals to more sustainable electric power, Al-Qahtani said.

He further explained that Aramco implemented one of the largest projects of its kind in the world to generate electricity in Jazan using gasification and integrated gasification combined cycle (IGCC).

The project has a production capacity of 3,800 megawatts of electricity to meet the refinery's needs, in addition to local industries, homes and commercial facilities in the region.

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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters
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Expert: Türkiye Anti-inflation Steps Don’t Go Far Enough

People shop at a bazaar in Istanbul. Reuters
People shop at a bazaar in Istanbul. Reuters

Although Turkish inflation slowed in September, it is still raging out of control with the government avoiding difficult decisions that could help tackle it, experts told AFP.

Türkiye has experienced spiraling inflation the past two years, peaking at an annual rate of 85.5 percent in October 2022 and 75.45 percent in May.

The government claims it slowed to 49.4 percent in September.

But the figures are disputed by the ENAG group of independent economists who estimate that year-on-year inflation stood at 88.6 percent in September.

Finance Minister Mehmet Simsek has said Ankara was hoping to bring inflation down to 17.6 percent by the end of 2025 and to “single digits” by 2026.

And President Recep Tayyip Erdogan recently hailed Türkiye’s success in “starting the process of permanent disinflation.”

“The hard times are behind us,” he said.

But economists interviewed by AFP said the surge in consumer prices in Türkiye had become “chronic” and is being exacerbated by some government policies.

“The current drop is simply due to a base effect. The price rises over the course of a month is still high, at 2.97 percent across Türkiye and 3.9 percent in Istanbul.

“You can’t call this a success story,” said Mehmet Sisman, economics professor at Istanbul’s Marmara University.

Spurning conventional economic practice of raising interest rates to curb inflation, Erdogan has long defended a policy of lowering rates. That has sent the lira sliding, further fueling inflation.

But after his reelection in May 2023, he gave Türkiye’s Central Bank free rein to raise its main interest rate from 8.5 to 50 percent between June 2023 and March 2024.

The central bank’s rate remained unchanged in September for the sixth consecutive month.

“The fight against inflation revolves around the priorities of the financial sector. As a result, it is done indirectly and generates uncertainty,” explained Erinc Yeldan, economics professor at Kadir Has University in Istanbul.

But raising interest rates alone is not enough to steady inflation without addressing massive budget deficits, according to Yakup Kucukkale, an economics professor at Karadeniz Technical University.

He pointed to Türkiye’s record budget deficit of 129.6 billion lira (3.45 billion euros).

“Simsek says this is due to expenditure linked to the reconstruction in regions hit by the February 2023 earthquake,” he said of the disaster that killed more than 53,000 people.

“But the real black hole is due to the costly public-private partnership contracts,” he said, referring to infrastructure contracts which critics say are often awarded to firms close to Erdogan’s government.

Such contracts cover construction and management of everything from motorways and bridges to hospitals and airports, and are often accompanied by generous guarantees such as state compensation in the event they are underused.

“We should question these contracts, which are a burden on the budget because this compensation is indexed to the dollar or the euro,” said Kucukkale.

Anti-inflation measures also tend to impact low-income households at a time when the minimum wage hasn’t been raised since January, he said.

“But these people already have little purchasing power. To lower demand, such measures must target higher-income groups, but there is hardly anything affecting them,” he said.