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Saudi Arabia on Track to Become One of the World’s Largest Logistics Platforms

CAPTION: Saudi Arabia poised to become one of the largest and most essential logistics platforms in the world (Asharq Al-Awsat)
CAPTION: Saudi Arabia poised to become one of the largest and most essential logistics platforms in the world (Asharq Al-Awsat)
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Saudi Arabia on Track to Become One of the World’s Largest Logistics Platforms

CAPTION: Saudi Arabia poised to become one of the largest and most essential logistics platforms in the world (Asharq Al-Awsat)
CAPTION: Saudi Arabia poised to become one of the largest and most essential logistics platforms in the world (Asharq Al-Awsat)

Authorities developing and modernizing Saudi Arabia’s logistics and transportation sector under a national strategy launched by Crown Prince Mohammed bin Salman will elevate the Kingdom’s position as an international logistics platform, experts told Asharq Al-Awsat.

On Tuesday, Crown Prince Mohammed bin Salman launched the “National Transport and Logistics Strategy” to enhance the Kingdom’s connection with the global economy and enable it to invest in its geographical position at the center of three continents.

According to specialists, the strategy will not only put Saudi Arabia on the map as one of the largest logistics platforms worldwide, but it will also build up the Kingdom’s capacities and facilitate meeting goals set out by the national transformation plan, “Vision 2030.”

Saudi Arabia’s idiosyncratic geographical location would enable it to achieve the strategy’s targets in the near future, they affirmed.

“The National Transport and Logistics Strategy is one of the most vital objectives of “Vision 2030,” and it contains a set of major projects that enhance Saudi Arabia’s position in global logistics services, develop infrastructure, and create logistics zones,” Shura Council member Fadel bin Saad Al-Buainain told Asharq Al-Awsat.

Al-Buainain indicated that one of the strategy’s objectives is to link the Arab Gulf states with a railway. This will strengthen interconnectivity by establishing a logistical network.

The network will link Gulf states economically, developmentally, and socially, and boost security as well, the Council member affirmed.

He stressed that the projects and objectives included in the strategy would improve the Kingdom’s logistic performance index, ranking it among the top ten countries globally.

As part of the strategy, the Ministry of Transport will be renamed the Ministry of Transport and Logistics Services.

Saleh Al-Jasser, the incoming minister of transport and logistics, said the strategy would help to enhance the Kingdom’s competitiveness on a regional and global level.

“The launch of the National Transport Strategy aims to develop infrastructure and operating systems to achieve the objectives of Vision 2030 and increase the sector’s contribution to the GDP to 10%,” affirmed Ajlan Al-Ajlan, who chairs both the Council of Saudi Chambers and the Board of Directors of the Riyadh Chamber.

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Dollar Mauled by Trump Trade War

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
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20
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Dollar Mauled by Trump Trade War

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo

The dollar hit three-month lows on Wednesday as the US' trade war with its partners escalated, while a major overhaul to German government borrowing triggered the biggest sell-off in the country's debt since the late 1990s.

In addition to the cocktail of tariffs and a seismic shift in German fiscal policy, investors also scrutinized the start of China's annual sessions of its parliament, the National People's Congress, at which Beijing retained a goal of roughly 5% economic growth for 2025.

The euro hit its highest in four months, while European stocks surged. The biggest casualties were longer-dated German government bonds, caught up in their worst one-day selloff in more than 25 years as yields ripped higher, Reuters reported.

Overnight, German political parties agreed to a 500 billion-euro ($534.75 billion) infrastructure fund and, crucially, an overhaul in borrowing limits that economists billed as "a really big bazooka".

"Last night Germany announced plans for one of the largest fiscal regime shifts in post-war history, perhaps with reunification 35 years ago being the only rival," Deutsche Bank strategist Jim Reid said.

"Everything you thought you knew about Germany's economic prospects three months ago, or even three weeks ago, should be ripped up and you should start your analysis from fresh," he said.

German 30-year yields - the rate the government pays to borrow over the very long term - rose by almost a quarter of a percentage point in early trading, on track for their largest rise since October 1998.

The 30-year bond yield was last up 20 basis points at 3.03%.

"It’s a recognition that something has changed. Germany is the benchmark against which all these other markets are measured. And so this big transition in German fiscal policy is significant," Dario Perkins, managing director, global macro at TS Lombard, said.

"We’re a long way away from worrying about German fiscal problems. People have been pleading that Germany spends for the last 20 years."

Longer-dated yields elsewhere rose too, with French 30-year rates up 15 basis points at 4.0% and Italian 30-year bonds yielding 4.517%, up 17 bps.

Europe's STOXX 600 jumped by more than 1.2% to record highs. The prospect of a meaningful increase in European spending on security has sent the region's defence stocks soaring this month.

 

TRADE WAR INCOMING

 

US tariffs on imports from Canada, Mexico and China went into effect on Tuesday, when President Donald Trump also delivered his State of the Union address, in which he touted his successes since taking office six weeks ago.

Canada and China retaliated immediately, while Mexican President Claudia Sheinbaum vowed to respond likewise, without giving details.

With a full-on trade war underway, crude oil hit six-month lows, while bitcoin found its feet around $87,800 following a volatile week.

"Fears about weaker US and global economic activity are manifesting in the markets, with cyclicals driving the sell-off," said Kyle Rodda, senior financial markets analyst at Capital.com.

In China, the offshore yuan was a touch weaker at 7.2629, having staged its biggest one-day rally the previous session since Trump's inauguration as investors ditched the dollar.

Along with its unchanged economic growth target, Beijing committed more fiscal resources than last year to mitigate the impact of rising US tariffs.

China aims for a budget deficit of about 4% of gross domestic product in 2025, up from 3% in 2024.

Overnight, the US S&P 500 slid 1.2%, but futures rose 0.7% on Wednesday.

The US dollar index tumbled 0.5% to 105.03, bringing its losses over the last three days to 2.3%, the most in this timeframe since late 2022.

In the ascendant was the euro, which rose 0.6% to $1.0693, the most since mid-November, prompting a flurry of bullish forecasts from major investment banks.

Oil fell for a third day on Wednesday, under pressure from concern over energy demand as tit-for-tat tariffs ramp up and from OPEC+ plans to raise output in April.

Brent futures fell 1.3% to $70.09 a barrel, having hit $69.75 the previous day, the lowest since September.