IMF endorses Saudi plan for $500bn Neom zone

Visitors watch a 3-D presentation during an exhibition on ‘Neom,’ a new business and industrial city, in Riyadh. (Reuters)
Updated 01 November 2017

IMF endorses Saudi plan for $500bn Neom zone

DUBAI: The International Monetary Fund (IMF) has endorsed an ambitious Saudi Arabian plan to build a $500 billion business and industrial zone extending into Jordan and Egypt, saying the project could benefit the whole region.
Jihad Azour, head of the IMF’s Middle East department, said Riyadh would need to balance the huge cost of the zone and other economic projects with its drive to cut a big state budget deficit caused by low oil prices.
But the plan to develop the zone, known as Neom, could stimulate trade and allow the Middle East to capitalize on its location as a bridge between Asia and Europe, Azour said in an interview.
“It is a signal that greater regional cooperation is back on the table,” he said.
“We see value and necessity in regional cooperation.”
The Neom scheme, unveiled by Saudi Crown Prince Mohammed bin Salman at an international conference in Riyadh last week, would develop industries such as energy and water, biotechnology, food, advanced manufacturing and entertainment in a 26,500 square-kilometer (10,230 square mile) zone with its own laws and judicial system.
The project has been welcomed by Jordanian officials but so far there has been little public response from the Egyptian government, a diplomatic ally of Saudi Arabia. Riyadh has indicated that much of the huge cost of the zone will be borne by the Saudi government, but a large, though undisclosed, portion would come from domestic and international private investors.
Azour said major private sector participation would be important for Neom’s success, with the Saudi government providing land and regulation rather than trying to be closely involved in most investment decisions.
Governments in the region are starting to look outward again after having spent the past five or six years focused on coping with political instability and a plunge in oil prices, he added.
“Authorities in various countries are now reassessing more and more the need to do reforms and projects to grow faster and to address the issue of job creation.”
Neom could fit in with two other international economic schemes, Azour said: The Belt and Road Initiative, Beijing’s drive to win trade and investment deals along routes linking China to Europe, and the G-20 Compact with Africa that aims to promote private investment across the ­continent.
—  REUTERS


Conflict-hit Libya to restart oil operations but with low output

Updated 10 July 2020

Conflict-hit Libya to restart oil operations but with low output

  • There is significant damage to the reservoirs and infrastructure
  • A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker

TUNIS: Libya’s National Oil Corporation (NOC) lifted force majeure on all oil exports on Friday as a first tanker loaded at Es Sider after a half-year blockade by eastern forces, but said technical problems caused by the shutdown would keep output low.
“The increase in production will take a long time due to the significant damage to reservoirs and infrastructure caused by the illegal blockade imposed on January 17,” NOC said in a statement.
A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker, chartered by Vitol, which two sources at Es Sider port said had docked and started loading on Friday morning.
The blockade, which was imposed by forces in eastern Libya loyal to Khalifa Haftar’s Libyan National Army (LNA), has cost the country $6.5 billion in lost export revenue, NOC said.
“Our infrastructure has suffered lasting damage, and our focus now must be on maintenance and securing a budget for the work to be done,” NOC chairman Mustafa Sanalla said in the statement.
Control over Libya’s oil infrastructure, the richest prize for competing forces in the country, and access to revenues, has become an ever-more significant factor in the civil war.
The internationally recognized Government of National Accord, supported by Turkey, has recently pushed back the LNA, backed by the United Arab Emirates, Russia and Egypt, from the environs of Tripoli and pushed toward Sirte, near the main oil terminals.