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Jeddah Central Project to Boost GDP Growth, Expand Quality Activities

An economic leap is expected when implementing the Jeddah Central Project, which was launched by the Saudi Crown Prince on Friday (Asharq Al-Awsat)
An economic leap is expected when implementing the Jeddah Central Project, which was launched by the Saudi Crown Prince on Friday (Asharq Al-Awsat)
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Jeddah Central Project to Boost GDP Growth, Expand Quality Activities

An economic leap is expected when implementing the Jeddah Central Project, which was launched by the Saudi Crown Prince on Friday (Asharq Al-Awsat)
An economic leap is expected when implementing the Jeddah Central Project, which was launched by the Saudi Crown Prince on Friday (Asharq Al-Awsat)

The Jeddah Central Project, launched by Saudi Crown Prince Mohammed bin Salman on Friday, confirmed that Saudi cities are heading towards rapid and qualitative economic transitions, with the government implementing a number of vital projects that support all promising sectors.

According to specialists, the new giant project will raise the economic value of the western Saudi city, Jeddah, which is home to one of the most significant and largest sea and air ports on the Red Sea.

Spanning over more than 5.7 million square meters, the project will also push the growth of domestic product, expand quality activities, and generate jobs.

Turki Fadaq, a financial analyst, confirmed to Asharq Al-Awsat that the launch of such projects has multiple positive repercussions on the Saudi economy in general.

He noted that the financing of the project will be done by the Public Investment Fund and investors from inside and outside the Kingdom. This means that the government will not bear the brunt of spending on the project.

Fadaq added that the project will lead to the provision of economic and social activities and events that will reflect on the growth of the domestic product for various sectors.

Also, it will support the generation of economies for culture, tourism, sports, and other sectors. This will help improve and develop the urban appearance of Jeddah.

The Jeddah Central Project is expected to achieve an estimated added value of SR47 billion for the Kingdom’s economy by 2030.

It will include four notable landmarks — an opera house, a museum, a sports stadium and an oceanarium — and contribute to opening the way for the local private sector to participate in the development, which will help shape the operation of promising economic sectors including tourism, entertainment, culture and sports.

In addition, the city will benefit from the building and development of modern residential areas, encompassing 17,000 residential units and diversified hotel projects that offer more than 2,700 hotel rooms, and the provision of integrated solutions for the business sector.

The project will feature a world-class marina and stunning beach resorts, as well as restaurants and cafes, and diverse shopping options.

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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.