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Threats to Maritime Navigation Prompt Saudi Boosting of Regional Alliances

The commander of the Saudi Royal Navy floats the first corvette from the Sarawat project in 2019(SPA)
The commander of the Saudi Royal Navy floats the first corvette from the Sarawat project in 2019(SPA)
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Threats to Maritime Navigation Prompt Saudi Boosting of Regional Alliances

The commander of the Saudi Royal Navy floats the first corvette from the Sarawat project in 2019(SPA)
The commander of the Saudi Royal Navy floats the first corvette from the Sarawat project in 2019(SPA)

Need for more international cooperation and coordination to deter threats facing the safety of waterways in the Arab region is increasing, especially for countries bordering exposed maritime corridors.

Safeguarding maritime navigation is geopolitically vital for the global economy.

Saudi Arabia, for example, oversees two important maritime routes in the Arabian Gulf and the Red Sea, with its coasts stretching for about 3,400 kilometers and its kingdom including 1,300 islands.

This has prompted the Saudi Defense Ministry to make building high combat capabilities for its military forces part and parcel of its strategy to meet regional challenges and threats.

The Kingdom has also strengthened its naval military capabilities through implementing qualitative projects that included signing deals for ships and aircraft and participating in naval drills with various other countries.

More so, political and military alliances were formed to protect maritime navigation.

It is worth noting that Saudi Arabia, which has one of the world’s largest military budgets, is looking to localize some 50% of its military spending by 2030.

Maritime navigation in the Arab Gulf has come under frequent attacks, mostly staged by Iranian proxies.

Iran-backed Houthi militias have been responsible for numerous terrorist hits that threatened navigation in Red Sea waters.

Houthis rely heavily on planting Iran-made naval mines.

The Saudi-led Arab Coalition has said it has found and destroyed five Iranian-made “Sadaf” naval mines during the past 24 hours, according to a statement published on Monday.

The coalition said it has seen an increase in the Houthi militia’s activity in planting naval mines in the southern parts of the Red Sea and the Bab al-Mandab strait in recent weeks.

There is an estimated 160 arbitrarily planted naval mines threatening Yemeni waters at the moment.

Houthis also use remote-controlled explosive vessels to threaten trade ships and civilian institutions in the Red Sea.

Royal Saudi Naval Forces (RSNF) Commander Vice Adm. Fahad Abdullah Al-Ghofaily, speaking at a recent event in Riyadh, recounted attacks that targeted three oil tankers and over three commercial ships sailing the region’s waters.

Commenting on finding solutions for those threats, writer and political researcher Abdullah al-Junaid argues that the source of danger must be first defined and the partial political cover given to some regional players, such as Iran and Turkey, must be lifted.

On the political and military alliances and blocs, Junaid noted that the maritime leadership of the Gulf Cooperation Council (GCC) is one of the regional examples of political and military alliances formed to secure navigation in the Strait of Hormuz.

It was established to safeguard navigation based on common interests and the stability of energy markets.

The Peninsula Shield Force, which is the military arm of the GCC, must be viewed from the scope of future challenges it will meet, added Junaid.

Threats facing Saudi Arabia also prompted the formation of naval military alliances designed to raise readiness levels, enhance maritime security in the Arabian Gulf, and protect vital and strategic interests.

Early in 2020, the Council of Arab and African States Bordering the Red Sea and the Gulf of Aden was created as a mechanism for improving the security of regional waterways. This new Arab-African alliance has eight members: Djibouti, Egypt, Eritrea, Saudi Arabia, Somalia, Sudan, Jordan and Yemen.

In November 2019, a multinational maritime security initiative, Coalition Task Force (CTF) Sentinel, composed of Australia, Bahrain, Saudi Arabia, the UAE, the UK, Albania and the United States, was also established with the aim to protect commercial vessels in the Arabian Gulf, the Gulf of Oman and Bab Al-Mandeb.

As for the steps Saudi Arabia has taken to modernize its naval forces, the kingdom witnessed in July 2018 the state-owned Saudi Arabian Military Industries (SAMI) signing a contract with Spanish shipbuilding company Navantia to build five Avante 2200 corvettes for the RSNF.

The deal is set to be completed by 2022. In addition to the Avante 2200 corvettes, the contract includes setting out a plan for the creation of a naval construction center in Saudi Arabia. According to SAMI the agreement would “localize more than 60 percent of ships combat systems works,” including installation and integration in the Saudi market.

Riyadh has sought partnerships in the past few years with international suppliers to boost its domestic manufacturing capacity.

Regarding the localization of military manufactures, Saudi Arabia has succeeded in establishing joint cooperation with French builder CMN for the production and export of 39 HSI32 Inceptors.

The vessels are among the most modern speedboats and will contribute to raising combat readiness of the maritime units and help protect the strategic interests of the kingdom.

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Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
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Borderless Europe Fights Brain Drain as Talent Heads North

Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo
Eszter Czovek, 45, packs up her house as she moves to Austria, in Budapest, Hungary, October 28, 2024. REUTERS/Bernadett Szabo

Until recently aerospace engineer Pedro Monteiro figured he'd join many of his peers moving from Portugal to its richer European neighbors in the quest for a better-paid job once he completes his master's degree in Lisbon.
But tax breaks proposed by Portugal's government for young workers - up to a temporary 100% income tax exemption in some cases - plus help with housing are making him think twice.
"Previous governments left young people behind," said Monteiro, 23, who is studying engineering and industrial management at the Higher Technical Institute in the Portuguese capital. "The country needs us and we want to stay but we need to see signs from the government that they are implementing policies that will help."
Monteiro cites in particular the cost of buying or renting a home amid a housing crisis aggravated by the arrival of wealthy foreigners lured by easy residency rights and tax breaks, Reuters said.
He is doubtful the government's new measures will be enough.
"Some of my friends are now working abroad and earn substantially more money... and have better career development opportunities," he said. "I'm a little bit skeptical concerning my job opportunities here in Portugal."
Portugal is the latest country in Europe to seek to tackle a brain drain holding back its economy. Tax breaks for young workers in the budget currently going through parliament will take effect next year and could benefit as many as 400,000 young people at an annual cost of 525 million euros.
Talent flight to wealthier countries of the north is a problem Portugal shares with several others in southern and central Europe, as workers take advantage of freedom of movement rules within the trade bloc. Countries including Italy have tried other schemes to counter the flight, with mixed results.
By exacerbating regional labor shortages and depriving poorer countries of tax revenues, it is yet another hurdle for the EU as it tries to improve its ebbing economic growth while addressing population decline and lagging labor productivity.
Donald Trump's victory in US elections this month raises the stakes, with the risk of across-the-board trade tariffs on European exports of at least 10% - a move that economists say could turn Europe's anaemic growth into outright recession.
About 2.3 million people born in Portugal, or 23% of its population, currently live abroad, according to Portugal's Emigration Observatory. That includes 850,000 Portuguese nationals aged 15-39, or about 30% of young Portuguese and 12.6% of its working-age population.
More concerning still is that about 40% of 50,000 people who graduate from universities or technical colleges emigrate each year, according to a study by Business Roundtable Portugal and Deloitte based on official statistics, costing Portugal billions of euros in lost income tax revenue and social security contributions.
DEMOGRAPHIC HELL
"This is not a country for young people," said Pedro Ginjeira do Nascimento, executive director of Business Roundtable Portugal, which represents 43 of the largest companies in the nation of 10 million people. "Portugal is experiencing a true demographic hell because the country is unable to create conditions to retain and attract young talent."
Internal migration within the EU is partly driven by the disparity in wages between its member states. Some economic migrants also say they are looking for better benefits such as pensions and healthcare and less rigid, hierarchichal structures that give more responsibility to those in junior roles.
Concerns are mounting over the long-term viability of Europe's economic model with its rapidly ageing population and failure to win substantial shares of high-growth markets of the future, from tech to renewable energy.
Presenting a raft of reform proposals aimed at boosting local innovation and investment, former European Central Bank chief Mario Draghi said in September the region faced a "slow agony" of decline if it did not compete more effectively.
Eszter Czovek, 45, and her husband are moving from Hungary to Austria, where workers earn an average 40.9 euros ($29.95) per hour compared to 12.8 euros per hour in Hungary, the largest wage gap between neighboring countries in the EU.
The number of Hungarians living in Austria increased to 107,264 by the beginning of 2024 from just 14,151 when Hungary joined the EU.
Czovek's husband, who works in construction, was offered a job in Austria, while she has worked in media and accounting at various multinationals. She cited better pay, pensions, work conditions and healthcare as motives for moving. She also mentioned her concern over the political situation in Hungary, which she fears might join Britain in leaving the EU.
"There was a change of regime here in 1989 and 30 years later we are still waiting for the miracle that will see us catch up with Austria," Czovek said of the revolution over three decades ago that ended communist rule in Hungary.
Since Brexit, the Netherlands has replaced Britain as a preferred destination for Portuguese talent while Germany and Scandinavian countries are also popular.
Many Europeans still head to the United States in search of better jobs - about 4.7 million were living there in 2022, according to the Washington-based Migration Policy Institute, which nonetheless notes a long-term decline since the 1960s.
In 2023, 4,892 Portuguese emigrated to the Netherlands, surpassing Britain for the first time, which in 2019 received 24,500 Portuguese.
At home, they face the eighth-highest tax burden in the Organization for Economic Co-operation and Development (OECD) even as house prices rose 186% and rents by 94% since 2015, according to property specialists Confidencial Imobiliario.
A single person in Portugal without children earned an average of 16,943 euros after tax in 2023 compared to 45,429 euros in the Netherlands, according to Eurostat.
Portugal will offer under 35s earning up to 28,000 euros a year a 100% tax exemption during their first year of work, gradually reducing the benefit to a 25% deduction between the eighth and tenth years.
Young people would also be exempted from transaction taxes and stamp duty when buying their first home as well as access to loans guaranteed by the state and rent subsidies.
"We are designing a solid package that tries to solve the main reasons why the young leave," Cabinet Minister Antonio Leitao Amaro said in an interview with Reuters.
'THINGS WON'T CHANGE'
Leitao Amaro said he did not know for sure if the tax breaks would work but that his government, which came into office in April, had to try something new.
"If we don't act ambitiously, things won't change and Portugal will continue down this path," he said.
The Italian government has already found that tax breaks used as incentives are costly and open to fraud.
In January, Italy abruptly curtailed its own scheme that was costing 1.3 billion euros in lost tax revenue, even as it lured tech workers such as Alessandra Mariani back home.
Before 2024, returners were offered a 70% tax break for five years, extendable for another five years in certain circumstances. Now, it plans to offer a slimmed-down scheme targeting specific skills after it attracted only 1,200 teachers or researchers - areas where Italy has a particular shortage.
Mariani said the incentives were key to persuading her to return to Milan in 2021 by allowing her to maintain the same standard of living she enjoyed in London.
"Had the opportunity been the same without the scheme, I would not have done it at all," said Mariani, now working at the Italian arm of the same large tech company.
With her tax breaks poised to be phased out by 2026 unless she buys a house or has a child, Mariani faces a drop in salary and she said she's once again eyeing the exit door.