Geopolitical Tensions Top Bahrain Summit’s Economic Agenda

Jeddah Islamic Port (General Ports Authority)
Jeddah Islamic Port (General Ports Authority)
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Geopolitical Tensions Top Bahrain Summit’s Economic Agenda

Jeddah Islamic Port (General Ports Authority)
Jeddah Islamic Port (General Ports Authority)

Geopolitical challenges and tensions in the Middle East cast a shadow over the Arab Summit that will be held in Bahrain on Thursday. However, these challenges can encourage Arab countries to move towards reaching a declaration of a common Arab market, amid the continued disruption of global supply chains and the emergence of the food security crisis.

The establishment of the Arab Common Market is likely to reduce the risks of dependence on global supply chains, which are suffering from successive disruptions that have already affected the growth rates of some economies, including Arab countries.

This advantage was clearly evident in the electrical interconnection agreements between Saudi Arabia and Egypt, as well as the integrated industrial partnership for sustainable economic development between Egypt, Bahrain, Jordan, the Emirates and Morocco.

Economic challenges

Economic growth rates represent an important challenge for Arab countries. Some states saw a decline in the employment rate and an increase in debt, as a result of the direct consequences of external factors on their economies, such as the Israeli war in Gaza, the Russian-Ukrainian war, and the repercussions of the outbreak of the Covid-19 pandemic.

These factors forced some countries to devalue their currencies against the dollar, which led to a decline in the purchasing value of consumers in parts of the Arab world, in parallel with an increase in inflation rates, which subsequently put pressure on Arab economies.

All these factors have led the International Labor Organization (ILO) to expect unemployment rates in the Arab region to remain high at levels of 9.8 percent during the current year.

Economic integration and the Arab market

The Arab countries have taken important steps towards economic integration, since the launch of the Arab Free Trade Area, which aims to increase levels of intra-trade and remove customs tariffs, leading to the Arab Customs Union, and then the Arab Common Market.

While supporting regional integration requires providing investment incentives and the transfer of intra-Arab capital, Arab countries have recently sought to integrate trade in services within intra-trade liberalization negotiations, in view of the strategic importance of the services sector and its contribution of about 48 percent of the gross domestic product.

In this context, the upcoming summit in Bahrain will discuss an important item on its agenda, which focuses on progress achieved in completing the requirements of the Greater Arab Free Trade Area and the establishment of the Arab Customs Union.

“The economic, social and development fields are the cornerstone of Arab action”, said Arab League Secretary-General Ahmed Aboul Gheit during the meeting of the Economic and Social Council within the preparations for the 33rd session of the League of Arab States Council meeting at the summit level.

In recent press statements, the Secretary General of the Union of Arab Chambers, Dr. Khaled Hanafi, expected intra-Arab trade to grow by 4 percent to 18 percent during 2025, explaining that the volume of trade among Arab countries is estimated at about $700 billion dollars.



UK Inflation Jumps to 3.1% in August as Fuel Prices Rise

FILE PHOTO: Canary Wharf, from the Horizon 22 viewing platform in London, Britain, June 9, 2026. REUTERS/Chris J. Ratcliffe/File Photo
FILE PHOTO: Canary Wharf, from the Horizon 22 viewing platform in London, Britain, June 9, 2026. REUTERS/Chris J. Ratcliffe/File Photo
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UK Inflation Jumps to 3.1% in August as Fuel Prices Rise

FILE PHOTO: Canary Wharf, from the Horizon 22 viewing platform in London, Britain, June 9, 2026. REUTERS/Chris J. Ratcliffe/File Photo
FILE PHOTO: Canary Wharf, from the Horizon 22 viewing platform in London, Britain, June 9, 2026. REUTERS/Chris J. Ratcliffe/File Photo

Britain's annual inflation rate climbed in line with analysts' expectations in August, official data showed Wednesday, as the Middle East war drove up fuel prices.

The Consumer Prices Index rose 3.1 percent in the 12 months to August, up from 2.9 percent the previous month, the Office for National Statistics said, according to AFP.

Higher inflation adds pressure on Prime Minister Andy Burnham and his finance minister John Healey to ease the cost of living for households ahead of the Labour government's budget update next month.

The Bank of England is forecast to maintain its benchmark interest rate at 3.75 percent on Thursday as the UK economy struggles for growth.

To tackle persistently high consumer prices, the US Federal Reserve is expected Wednesday to also lift borrowing costs, following a similar move by the European Central Bank last week.

With central bank interest rates on the rise -- and government bond yields reaching multi-decade highs in recent weeks -- Healey has pledged to maintain strict fiscal discipline.

But he has not been drawn on whether this means his budget on October 28 will include new tax rises.

Analysts expect inflation to rise towards the end of the year as higher energy costs feed through to bills further, with little sign of a deal to end the Middle East war.

"With the situation in the Middle East looking increasingly fraught, the expectation is that inflation will continue to climb higher until the end of the year at a minimum," said Richard Carter, head of fixed interest research at Quilter Cheviot.

"For the government, today's figures are a kick in the teeth for an administration that wants to make easing the cost of living its central mission," he added.


Sudair Pharma: World’s Largest Insulin Plant Opens in Saudi Arabia in 2027

A panel discussion at the Saudi Industry Forum in Jeddah (Asharq Al-Awsat)
A panel discussion at the Saudi Industry Forum in Jeddah (Asharq Al-Awsat)
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Sudair Pharma: World’s Largest Insulin Plant Opens in Saudi Arabia in 2027

A panel discussion at the Saudi Industry Forum in Jeddah (Asharq Al-Awsat)
A panel discussion at the Saudi Industry Forum in Jeddah (Asharq Al-Awsat)

Saudi Arabia is moving to strengthen its pharmaceutical security on two parallel fronts: expanding domestic production of biologic medicines and building a system better able to anticipate supply-chain disruptions.

Sudair Pharma said it would begin producing insulin locally in 2027 through an investment exceeding 280 million riyals ($74.6 million) in what the company described as the world’s largest insulin plant.

Meanwhile, NUPCO has reached the final stage of deploying artificial intelligence to predict drug shortages and supply disruptions before they occur.

The initiatives bring manufacturing and inventory management under a single system, aimed at reducing reliance on foreign supply chains and strengthening the kingdom’s ability to respond to potential global shortages.

Reliable supplies in the sector depend directly on the availability of active pharmaceutical ingredients, production capacity and the speed at which products reach healthcare facilities.

The plans were unveiled during a session titled “Saudi Pharmaceutical Security: Localization Strategies and Building Health Sovereignty” at the Saudi Industry Forum 2026 in Jeddah.

The session focused on achieving self-sufficiency in essential and life-saving medicines, attracting investment in biotechnology and vaccines, transferring technology to domestic factories and improving the sector’s ability to withstand global crises.

Production inputs

Dr. Yasser Alobaidaa, chief executive of Sudair Pharma, said the company would begin producing insulin locally next year, adding that the project would cover every stage of manufacturing in Saudi Arabia rather than merely filling and finishing.

The project, which will cost more than 280 million riyals, will produce advanced types of long- and short-acting insulin, he said, describing the facility as “the world’s largest insulin plant.”

The project also extends to securing production inputs. Alobaidaa said the factory would maintain a three-year stock of active pharmaceutical ingredients, or APIs, allowing local insulin production to continue even if foreign supplies were disrupted.

Work to localize insulin production has been underway for more than four years, he said, adding that NUPCO’s involvement helped accelerate the project. He also highlighted the company’s role in supporting domestic manufacturers and expanding access to healthcare facilities for their products.

Supply chains

On the other front of pharmaceutical security, Fahd Al-Bat’hi, chief executive of NUPCO’s supply-chain division, said the company had reached the final stage of deploying artificial intelligence at its Command and Control Center.

The technology will be used to predict potential shortages or supply-chain disruptions, allowing contingency plans and alternatives to be prepared before problems arise.

Al-Bat’hi said the company produces internal monthly reports that track forecasts and warnings about disruptions that could affect supplies in the coming months, drawing on indicators and information related to global markets and companies.

NUPCO also works with the Saudi Food and Drug Authority through an Availability and Indicators Committee that meets almost weekly, he said. The committee monitors global shortage indicators and potential supply risks, and identifies coverage mechanisms and available alternatives.

Vital products

Al-Bat’hi said the company aimed to maintain a three-month inventory of non-life-saving items, alongside measures to ensure vital products remain available.

NUPCO’s Mawsool project and direct-delivery operations have improved visibility over inventory movements from warehouses to healthcare facilities, he said.

A further measure, due to begin in 2027, will allow manufacturers to view inventory and consumption levels, giving them the flexibility to increase or reduce production in response to actual demand.

Al-Bat’hi said localization was among the most important solutions to supply-chain risks because domestic manufacturers could respond more quickly to demand and adjust production as needs changed.

With a new insulin plant, a three-year stock of active pharmaceutical ingredients, and AI systems designed to anticipate shortages, Saudi pharmaceutical security is shifting beyond managing inventory after products reach the market.

The emerging system begins with active ingredients and domestic manufacturing, and extends to demand and risk forecasting, reducing exposure to external shocks and increasing the local industry’s share of the pharmaceutical value chain.


Saudi Arabia Bets on Small Businesses to Drive Its Next Growth Phase

Crown Prince and Prime Minister Mohammed bin Salman during the Cabinet meeting in Jeddah (SPA)
Crown Prince and Prime Minister Mohammed bin Salman during the Cabinet meeting in Jeddah (SPA)
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Saudi Arabia Bets on Small Businesses to Drive Its Next Growth Phase

Crown Prince and Prime Minister Mohammed bin Salman during the Cabinet meeting in Jeddah (SPA)
Crown Prince and Prime Minister Mohammed bin Salman during the Cabinet meeting in Jeddah (SPA)

Saudi Arabia is entering a new phase in its economic diversification drive, placing small and medium-sized enterprises and entrepreneurship at the heart of growth.

The shift follows the Cabinet’s Tuesday approval of a new national strategy for the sector at a meeting chaired by Crown Prince Mohammed bin Salman.

The kingdom aims to turn SMEs from a broad base of business activity into a stronger force in production, investment, and job creation. The strategy seeks to widen access to financing and markets while helping businesses scale up and compete.

It reflects a Saudi bet on a new generation of growing companies that can help build a more diversified and resilient economy—one less reliant on large corporations alone to drive economic activity.

GDP Contribution

Commerce Minister Majid bin Abdullah Al-Qasabi, chairman of the Small and Medium Enterprises General Authority, known as Monsha’at, said the strategy would develop the entrepreneurship ecosystem, help businesses grow and expand, and increase their contribution to the national economy.

The goal is to raise SMEs’ share of gross domestic product to 35%, in line with Saudi Vision 2030, he said.

The strategy comprises 13 initiatives within an integrated framework. They aim to improve access to financing and markets, strengthen businesses’ operational readiness and capabilities, develop the regulatory and innovation environment, and make it easier to do business.

Together, the measures are designed to create a more efficient environment for business growth and expansion.

The strategy also aims to help create more than 500,000 direct and indirect jobs and propel Saudi Arabia to first place in the Entrepreneurial Skills and Knowledge Index by 2030, Al-Qasabi said.

Access to Megaprojects

“The strategy reflects the attention and support the government gives to entrepreneurship and small and medium-sized enterprises,” Al-Qasabi said.

It translates that support into “a more integrated and efficient ecosystem that opens wider avenues for businesses to grow and increases their contribution to economic development,” he added.

Implementation will depend on coordination among the relevant entities, enabling SMEs to capture opportunities across sectors, expand their roles in value chains and megaprojects, and reach new markets in Saudi Arabia and abroad.

Beyond Growth in Numbers

The number of SMEs in Saudi Arabia exceeded 1.83 million by the end of the second quarter of 2026, Monsha’at Deputy Governor for Entrepreneurship Saud Al-Subhan told Asharq Al-Awsat.

“The ecosystem has achieved significant growth in recent years, with considerable opportunities for further growth and expansion,” he said.

The strategy marks a shift away from focusing primarily on the number of businesses toward sustainable growth, higher productivity, and greater capacity to scale up and enter new markets.

It also seeks to strengthen competitiveness, increase SMEs’ contribution to the national economy, and support promising, established, and new businesses in key and emerging sectors.

The broader aim is to build an enabling ecosystem that firmly establishes a culture of entrepreneurship, Al-Subhan said.

Twelve Priority Challenges

A comprehensive assessment of the sector identified 12 priority challenges, ranked according to their impact and how readily they could be addressed.

They include limited support for commercializing innovations, a heightened fear of failure linked to a weak entrepreneurship culture, and a shortage of specialized talent needed by businesses and entrepreneurs across sectors and regions.

Other challenges include weak infrastructure and purchasing power in outlying regions, high and difficult-to-predict business costs, limited access to financing, and a shortage of market data needed for decision-making.

SMEs also struggle to retain talent amid competition from large companies and the public sector, while manufacturing and supply chains face weaknesses in infrastructure and support services.

“The strategy does not stop at identifying the challenges,” Al-Subhan said. “It links them to initiatives designed to address them directly.”

Monsha’at prepared the national strategy and will oversee its implementation in coordination with relevant public, private, and nonprofit sector entities, in accordance with their respective regulatory responsibilities.

Execution will not rest with a single body, but on complementary roles across an integrated ecosystem, Al-Subhan said.

The strategy’s 13 core initiatives directly address the obstacles SMEs face and cover several areas critical to their growth.

They include developing open commercial innovation, increasing participation in government procurement, supporting exports and international expansion, improving access to financing, and reducing business costs.

The initiatives also call for a comprehensive sector database and a framework to monitor implementation and assess its impact.

The intended effect on Vision 2030 indicators is clear: SMEs contributing 35% of GDP, more than 500,000 direct and indirect jobs, and placing Saudi Arabia first in the Entrepreneurial Skills and Knowledge Index.

Empowering the Private Sector

The new strategy is part of a wider set of national strategies supporting Vision 2030.

Together, they form a long-term road map for empowering the private sector and directing efforts toward ambitious economic and development priorities. The aim is to strengthen Saudi Arabia’s position and competitiveness as a more diversified, innovative, and sustainable economy.

The initiatives include supporting open commercial innovation and enabling SMEs and startups to operate and grow in industrial cities and special economic zones.

They also seek to support exports and international expansion, increase SME participation in government procurement and purchases by large corporations, and create a comprehensive sector database linked to other relevant databases across the ecosystem.

Further measures include attracting global innovative startups and encouraging them to establish operations in Saudi Arabia, reviewing minimum Saudization requirements by sector, and reducing the cost of doing business.

The strategy also aims to strengthen financial awareness and literacy, develop financing enablers, and provide incentives for SME financing institutions, creating a business environment better equipped to support the sector’s expansion and sustain its economic impact.