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Saudi Industry, Construction Sectors Conclude Contracts Worth at Least $2b

The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)
The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)
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Saudi Industry, Construction Sectors Conclude Contracts Worth at Least $2b

The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)
The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)

Saudi Arabia's industrial and construction sectors are concluding agreements and contracts worth over $2 billion, according to the Ministry of Industry and Mineral Resources.

A report issued by the Ministry's National Center for Industrial and Mining Information indicated that the ministry issued 531 industrial licenses from the beginning of this year until July.

The number of existing and under-construction factories in Saudi Arabia reached 10.6 thousand, with an investment volume of about $363 billion.

The report indicated that investments following the new licenses in July amounted to $258.9 million, while small enterprises acquired most of the new industrial permits during the same month by 86.6 percent, followed by medium enterprises by 13.3 percent.

Local factories recorded the most significant proportion of the total licenses issued by a type of investment, accounting for 73.3 percent, followed by foreign enterprises at 20 percent and joint-investment enterprises at 6.6 percent.

Also, 22 factories began production in July, with investments amounting to $145.7 million, topped by the food industry with nine factories, followed by paper and nonferrous metal factories with four each.

The report revealed that the new industrial licenses were distributed among five administrative regions, topped by the Riyadh region with 15 licenses, followed by the Eastern region with seven licenses, then Makkah with six licenses, while al-Qassim and Madinah registered one license for each.

The Ministry of Industry and Mineral Resources issues, through the National Center for Industrial Information, a monthly bulletin with essential industrial indicators that clarify the nature of the movement of industrial activity in the Kingdom.

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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.