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Middle East Report with James Dorsey – 02 July 2021

Zuleikha Ahmed

Crown Prince Mohamed Bin Salman has set his sights on creating a second national airline for Saudi Arabia. The strategy is to turn the oil-rich kingdom into a global logistics hub and diversify its economy.

The prince has launched a transportation and logistics plan, including ports, rail and road networks. The second airline will focus on business and tourist travel, whilst Saudi, the current official carrier, will focus more on religious tourism and the pilgrimage.

Another flag carrier would replace the United Arab Emirates, Qatar and Turkey, as key geo-political-economic transportation logistics hubs in the Middle East. However, James Dorsey says it will not be a straightforward exercise as Qatar, Turkey and the UAE have a massive head start in the industry. Compared to these major airlines, Saudia, in terms of the number of destinations and passenger traffic, is minuscule.

There are also plan to develop ports on the Red Sea to connect to ports in the Persian Gulf. However, he stated that Dubai has DP World in port management, which manages more than 80 ports and container terminals globally.

Prince Salman’s vision of diversification for the Saudi economy rests on job creation. For him to maintain a steady unemployment rate, he needs to create  150 000 jobs per annum. Unemployment among Saudi Arabia’s citizens fell to its lowest level in nearly five years.

According to James Dorsey, the reason behind the drop is that many Saudi’s have withdrawn from participating in the labour market, which meant fewer jobs.

Many Western countries have recently backed the UN’s resolution condemning the Chinese treatment of Uighurs. For the first time, Israel has shifted its stance, aligning with the UN. According to Dorsey, it is a significant gesture toward the Biden administration while letting China know that there are limits to the two countries’ relationship.

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