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Saudi Arabia Builds Momentum for Diverse, Sustainable Development Finance

Riyadh governor attends launch of Development Finance Conference Momentum 2025 (Asharq Al-Awsat)
Riyadh governor attends launch of Development Finance Conference Momentum 2025 (Asharq Al-Awsat)
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Saudi Arabia Builds Momentum for Diverse, Sustainable Development Finance

Riyadh governor attends launch of Development Finance Conference Momentum 2025 (Asharq Al-Awsat)
Riyadh governor attends launch of Development Finance Conference Momentum 2025 (Asharq Al-Awsat)

Saudi Arabia is moving into a pivotal phase driven by development financing that prioritizes impact, diversification, sustainability and the growth of human capital, while lifting overall quality of life.

This shift, which marks a move from traditional financial support to measurable and lasting results, was reflected in the announcement that the National Development Fund system delivered more than 52 billion riyals, 13.9 billion dollars, in financing in one year, adding around 47 billion riyals, 12.5 billion dollars, to non-oil GDP.

The figures were unveiled at the Development Finance Conference Momentum 2025.

The event opened on Tuesday in the Saudi capital under the patronage of Crown Prince and Prime Minister Prince Mohammed bin Salman and in the presence of Riyadh Governor Prince Faisal bin Bandar bin Abdulaziz, marking a development push aimed at creating opportunities and shaping the future.

The conference draws more than 150 speakers, 120 countries and 30 exhibitors to discuss global financing challenges and opportunities in industry, sustainability, innovation and economic resilience.

Development financing

Mohammed Al-Tuwaijri, Vice Chairman of the National Development Fund, stressed in his opening remarks the importance of this global platform, which he said launches a new phase in the development financing journey with the goal of achieving sustained impact.

He said, From Riyadh, and through this conference, the National Development Fund presents promising insights across development fields, with contributions from prominent speakers and experts from around the world. The fund is helping to generate new momentum for development.

Al-Tuwaijri said the fund system provided more than 52 billion riyals in financing in one year, adding about 47 billion riyals to non-oil GDP.

He added that the system, which includes 12 development funds, supported more than one million beneficiaries and enabled thousands of citizens to access financing and entrepreneurship opportunities, alongside quality projects that helped diversify the economy, enhance sustainability and create long term jobs.

Sustainable energy

He said the Tourism Development Fund supported more than two thousand tourism projects, while the Cultural Development Fund financed more than 1,500 cultural projects, and the Industrial Development Fund financed 400 projects during the same period.

He added that the industrial fund allocated more than 20 % of its portfolio to sustainable energy projects, including green hydrogen capacity of 3.8 gigawatts and solar power projects totaling 2.6 gigawatts, as part of the kingdom’s efforts to strengthen the global green economy.

Infrastructure investment

Investment Minister Khalid Al-Falih said the kingdom is a leading destination for global capital, particularly from advanced economies, adding that by 2030, or two years after, about one trillion dollars will be invested in infrastructure.

He said, Capital from advanced economies, such as Europe and Japan, is seeking destinations that offer long term certainty and stable returns, and Saudi Arabia is among the most prominent of these destinations.

Al-Falih said a large part of these investments is tied to pensions and insurance, which makes certainty about returns essential.

He noted that the kingdom is focused on developing sustainable infrastructure projects that include major airports, desalination, ports and distribution centers, in line with green financing standards to attract billions of dollars in investment that support Vision 2030.

Green bonds

Al-Falih said the kingdom holds the largest share of the market in green financing and represents two thirds of regional efforts, adding that the Public Investment Fund has several unique investment vehicles for century-long green bonds that have already begun trading.

He said these projects aim to deliver long term sustainability and enhance global capital participation in helping the kingdom achieve its medium and long term ambitions.

The workforce

Tourism Minister Ahmed Al-Khateeb said in a panel discussion on the sidelines of the conference that the tourism ecosystem employs about 10 % of the global workforce, or roughly 350 million people, and that the sector is one of the key drivers of diversifying the Saudi economy and advancing Vision 2030.

According to Al-Khateeb, Saudi tourism has seen unprecedented growth over the past decade, especially in the past five years. He chairs three of the twelve development funds in the kingdom, including the Tourism Development Fund, the Saudi Fund for Development and the Events Investment Fund.

He said the development funds play an important role locally, regionally and internationally, working with national and regional financing agencies such as the World Bank, other development funds in the region, the Islamic Development Fund and the French Development Agency, to support more than 800 projects that include clean water, hospitals, schools, roads and airports.

Tourism Development Fund

He said the Tourism Development Fund was created to stimulate the sector and is essential to achieving Vision 2030, noting that the private sector is the main player in tourism because of its major role in job creation.

The number of people working in tourism is expected to rise to about 500 million by 2034. Small and medium enterprises, which represent about 80 % of travel and tourism activity, will benefit greatly. The fund financed more than 10,000 SMEs over the past three years, he said.

Events Investment Fund

Al-Khateeb said the Events Investment Fund was created to develop events related infrastructure such as marinas, theaters and tourism facilities, and to finance the private sector to build and operate these sites at attractive financing costs, enabling investment in soft infrastructure after the government provides the hard infrastructure such as roads, airports and electricity.

He said developing mega projects such as the Red Sea project and its islands creates diverse jobs and helps diversify the economy and increase prosperity, noting that development financing plays a central role in unlocking economic and social value for any tourism site.

National strategy

He said Saudi tourism grew six % last year, nearly double the global average, and that tourism spending rose 11 % to 284 billion riyals, 75 billion dollars, in 2024, underscoring the sector’s strong investment potential over the next ten to twenty years.

He discussed the national tourism strategy launched in 2019, which focuses on visitor spending and its impact on GDP and employment. The tourism sector’s contribution to GDP rose from 3 % in 2019 to about 5 % last year, he said, with a target of reaching 10 % by 2030 and expanding later to 13 to 15 % to become the kingdom’s second largest economic contributor.

Al-Khateeb concluded by stressing the importance of planning for the next generation of tourism, including the use of artificial intelligence to enhance visitor experience and prioritizing the consumer. He said the kingdom is working to develop the sector in an innovative and sustainable way so it becomes a strong driver of the non-oil economy.

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Business

Iran War and Rising Fuel Costs Could Boost Panama Canal Traffic, Administrator Says

A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)
A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)
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Iran War and Rising Fuel Costs Could Boost Panama Canal Traffic, Administrator Says

A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)
A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Thursday, March 12, 2026. (AP)

Panama Canal Administrator Ricaurte Vásquez said Thursday that the conflict in the Middle East and rising fuel costs could ultimately benefit the interoceanic waterway as global shippers adjust routes.

In an interview with The Associated Press, Vásquez said that higher energy, fuel and navigation costs could make the Panama Canal a more attractive option for commercial traffic.

“When costs increase, in general when the price of marine fuel rises, the Panama Canal becomes a more attractive route,” Vásquez said.

Oil prices have risen amid the war in the Middle East, which has led to the temporary closure of the Strait of Hormuz by Iran in response to US and Israeli attacks. About one-fifth of the world’s oil passes through the waterway at the mouth of the Gulf.

If higher energy costs persist, routing cargo through Panama can cut voyages by between three and 15 days, depending on the route, while reducing fuel consumption, he said.

Vásquez said higher fuel costs are expected to affect container ships, bulk carriers and tankers transporting liquefied natural gas. If Middle Eastern supplies are disrupted, shipments may be replaced by other sources, including the United States, which could redirect some LNG cargo from Europe to Asia via Panama.

Gerardo Bósquez, an executive with the Panama Maritime Chamber, said a prolonged conflict could reshape global trade routes, with gas transport among the segments likely to benefit.

Vásquez cautioned that any changes will not be immediate and will depend on how long cargo operators expect the conflict and instability in the Gulf last.

Business

ONS Data: UK Economy Lost Steam Unexpectedly at Start of 2026

FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo
FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo
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ONS Data: UK Economy Lost Steam Unexpectedly at Start of 2026

FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo
FILE PHOTO: A direction sign is seen near the Bank of England building in London, Britain, February 3, 2025. REUTERS/Toby Melville//File Photo

Britain's economy stagnated unexpectedly in January and expanded weakly in preceding months, according to official data on Friday that showed only tepid growth during the lead-up to the US-Israeli war in Iran.

The figures mean British gross domestic product has been essentially flat since June, ending January at the same level as six months earlier.

GDP rose during the three months to January by 0.2%, the Office for National Statistics ⁠said, against expectations ⁠in a Reuters poll of economists for a 0.3% increase.

The flat reading for January alone also dashed the median prediction for a 0.2% month-on-month increase.

Sterling slipped against the US dollar on the back of the figures, which showed no ⁠growth in the dominant services sector in January, against modest upticks in manufacturing and construction output.

Last month, the Bank of England said it expected the economy to grow 0.3% in the first quarter as a whole and 0.9% over 2026 as a whole - although that was before the conflict in Iran kicked off, prompting a surge in oil prices.

Earlier this week, finance minister Rachel Reeves ⁠said ⁠it was too soon to say how soaring energy prices would affect Britain's economy.

But investors see it as more exposed than other Western European economies due to its weak public finances, reliance on natural gas for electricity generation, and already high rates of inflation.

Financial markets no longer believe the Bank of England is likely to cut interest rates this year, and investors will be watching the central bank's communications carefully at next Thursday's interest rate announcement.

Business

Air Freight Rates Soar as Middle East Conflict Blocks Trade Routes

Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
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Air Freight Rates Soar as Middle East Conflict Blocks Trade Routes

Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)

Air freight rates have risen by as much as 70% on some routes since the start of the US-Israeli war on Iran, data shows, as the conflict limits flights, blocks some ocean shipments and pushes up jet fuel costs.

Rates on routes between South Asia and Europe have been the most affected by Middle Eastern airspace closures and security issues, industry experts said, after the conflict has stranded more than 100 container ships in the area around the critical Strait of Hormuz oil export corridor.

Products like inexpensive generic medicines from India destined for the European Union, Africa and some Arab countries like Saudi Arabia and the United Arab Emirates typically move on container ships through the strait, said pharmaceutical supply chain expert Prashant Yadav.

"The main shift I’ve heard about involves companies moving generic ‌medicines from ocean ‌freight to air cargo," said Yadav, a senior fellow at the Council on ‌Foreign ⁠Relations.

The shift to ⁠air cargo is significant because air freight handles about one-third of global trade by value, making rate spikes a potential inflationary pressure on goods ranging from fresh food to pharmaceuticals and electronics.

"Customers are shifting freight from ocean to air, however it is extremely expensive - typically 5x to 10x higher - and those costs are climbing as capacity tightens," said Steve Blough, chief supply chain strategist at logistics software firm Infios. "More often, shippers are moving a limited quantity by air to bridge a gap."

JET FUEL PRICE DOUBLES

The jet fuel price has doubled since the start of the conflict, and Danish container ⁠shipping giant Maersk said this week its own air cargo service is now applying ‌fuel surcharges and war risk levies.

The airspace closures have also cut ‌cargo capacity in freighters and passenger planes as airlines take longer routes to avoid the conflict zone, further pressuring rates.

Dubai and ‌Doha are normally among the world's busiest air cargo hubs, but operations at those airports have been ‌severely limited by the Middle Eastern conflict.

Niall van de Wouw, chief air freight officer at transportation pricing platform Xeneta, attributed higher air cargo rates to a "dramatic reduction" in capacity at key Middle East transshipment hubs more than higher fuel prices.

Ronald Lam, the CEO of Hong Kong's Cathay Pacific Airways, said many of its freighter flights to Europe normally stop in Dubai to refuel ‌and pick up more cargo.

"But because of the situation in Dubai, we're now skipping that stopover and we are flying direct from Hong Kong to ⁠Europe with some payload restriction, ⁠because we couldn't uplift fuel in between," he said on an earnings call on Wednesday.

According to an air freight index from freight booking and payments platform Freightos, off-contract spot rates from South Asia to Europe have soared 70% to $4.37 per kg from $2.57 per kg just before the war began.

South Asia-North America rates are up 58% to $6.41 per kg, and Europe-Middle East rates have risen 55% to $2.79 per kg.

A significant share of air cargo exports from South Asia usually travels through Gulf hubs and some has had to reroute through East Asia, said Judah Levine, Freightos' head of research.

"That being said, we have seen the price increases on many of these lanes slow, level off or even decline slightly in the last couple days," he said.

"These trends may reflect Asian and European carriers adding capacity to these long-haul lanes to make up for the missing Gulf capacity, and they may also reflect some of the Gulf carriers - most importantly Emirates - having restarted operations and increasing the number of flights that are now leaving and arriving at these important Gulf hubs."