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RIYADH: Cyprus’s deputy tourism minister believes boosting ties with Saudi Arabia is a key part of helping his country diversify the travelers that visit his island.
Speaking to Arab News during a three-day visit to the Kingdom, Kostas Koumis insisted both countries “belong in the same neighborhood and the people have a similar way of thinking.”
The minister’s visit came as the two countries prepare to sign a memorandum of understanding to boost tourism flows in the wake of direct flights between the two countries commencing in March 2023.Cyprus is keen to revitalize its tourism industry after the devastating effects of the COVID-19 pandemic, with the island also seeing tourist numbers down thanks to the Ukrainian-Russian war.
“I came here to meet the people of the industry, the travel agencies, the tour operators, in order to to present them our country and try to help them, and also their efforts to promote Cyprus from our side to get the chance to welcome more people of Saudi Arabia to Cyprus,” he said, adding: “I am here to boost the market.”
Referring to the planned MoU, Koumis said: “It is about cooperation and tourists, and we believe that there are many reasons for the two countries to come closer.”
He added: “There are many reasons to establish cooperation. I believe it is expected that the two industries — the tourist industry of Cyprus and the industry of Saudi Arabia — will come closer.”
One of the main goals of his visit is to have the chance “to share ideas and to exchange information.”
Cyprus might be a small country but it punches above its weight when it comes to tourism, which accounts for 20 percent of its gross domestic product.
“We started receiving visitors in 1971 — Cyprus is considered as an established tourist destination for many years,” said the deputy minister.
The main tourism market is central and northern Europe, including Scandinavian countries, and Russia and Ukraine.
Koumis said: “The war in Ukraine halted the huge number of tourists coming from Russia and Ukraine to visit.
“In 2019 we had 876,000 visitors from Russia and Ukraine. Together, we lost these visitors.
“I know that it’s a gap which we’re trying to replace with visitors from maybe other countries.”
One country that does see Cyprus as a key holiday destination is Israel, with visitors from the state making up the second-largest market in April this year, accounting for almost 10 percent of all travelers.
Yet it is other countries in the region that Koumis is keen to appeal to, adding: “It’s the GCC (Gulf Cooperation Council) countries we never had the chance to have high numbers.”
The reason for that, he explained, was the historic lack of direct connections between GCC countries — something that has been remedied by Saudi Arabia.
“Now’s the time to boost these efforts because we have direct flights from Saudi Arabia. It’s about time to boost these efforts to get more and more visitors,” Koumis said.
The deputy minister met with Riyadh Air officials as part of his visit to Saudi Arabia and said: “The meeting went very well. We know the prospects of the plan. And of course, we are interested to see Riyadh Air execute flights towards Cyprus when they start.”
There are currently direct flights to Cyprus from Riyadh, Jeddah and Dammam, and Koumis believes any growth in tourism will be reciprocal.
In June, the deputy minister visited the UAE in a bid to drum up interest in Cyprus as a tourist destination.
His visit came after just 21,000 travelers from the UAE visited the island in 2022, a figure Koumis described as “a steady number for the past few years.”
He is hoping to increase this thanks to the opening of new routes between the two nations by Cyprus Airways in March.
Commenting on the beauty of his country and why people should visit, the deputy minister said: “As a summer destination we have five different beaches which every year are awarded among the top beaches in the world.
“This is one of the reasons why Cyprus established itself as a very, very famous summer destination. The color of the beach, the color of the water is considered among the best signatories of the Mediterranean Sea.
“Also the temperature of the water is really very good, very welcoming.”
Another selling point is one that Koumis believes has not been shared enough: the food.
He said: “Although we never promote our gastronomy to become fashionable all over the world, the truth is that we receive every year many visitors coming back for the quality of the food in Cyprus.
The deputy minister said his ministry plans to “promote the Cyprus gastronomy more,” adding: “We believe that it deserves it and it is something which probably we will discuss with the Ministry of Tourism of Saudi Arabia immediately after signing the MoU.”
RIYADH: Saudi Arabia’s business sector saw a boom across most segments in May, with banks extending loans, overdrafts and lines of credit to companies seeking to invest in their projects, purchase capital goods and expand operations.
Out of the 16 business segments of the National Classification of Economic Activities, 15 registered an annual increase in bank credit for May. The only segment that witnessed a dip was agriculture, forestry and fishing, which fell by 8.06 percent.
Bank credit to professional, scientific and technical activities in Saudi Arabia increased 49.49 percent to SR5.01 billion ($1.34 billion) in May, from SR3.35 billion in the same month last year, showed the latest data from the Saudi Central Bank, also known as SAMA.
SAMA’s recent monthly report revealed that the segment also recorded a 21 percent increase in bank credit compared to SR4.11 billion in April.
It encompasses a wide range of professional services, including legal and accounting, architectural and engineering, technical tests and analysis, and research and development in scientific fields.
The Kingdom has seen significant growth in the segment, with state-run institutions such as Research Development and Innovation Authority collaborating with the private sector to promote innovation and entrepreneurship.
The sector is also set to play a crucial role in the Kingdom’s Vision 2030 diversification strategy that aims to reduce dependence on oil revenues and develop a knowledge-based economy, with German research platform Statista projecting it to reach $8.5 billion in 2024.
Boosting the energy mix
The other segment that attracted significant bank credit was that covering electricity, gas and water suppliers, which booked a 34.79 percent rise to SR124.49 billion in May from SR92.35 billion in the year-ago period.
The segment also includes activities such as generating, transmitting and distributing electricity, gas and steam.
Water collection, treatment and supply are also included, as is the production and distribution of ice.
One of the biggest drivers in this sector is the Saudi Vision 2030 blueprint that aspires to replace the petroleum used to generate 42 percent of the country’s 110 gigawatts daily electricity needs with a mix of 50 percent natural gas and 50 percent renewable energy by 2030.
Moreover, the Ministry of Energy’s spending on power and renewable energy projects is expected to reach $293 billion by 2030.
Bank credit to professional, scientific and technical activities in Saudi Arabia increased 49.49 percent to SR5.01 billion ($1.34 billion) in May, from SR3.35 billion in the same month last year.
“Serious actions have been taken by the Kingdom aiming to diversify the energy supply mix and introduce energy efficiency programs. This strategy would benefit Saudi Arabia in the long-term by lowering the reliance on fossil fuels,” said Hani Aldhubaib, assistant professor of electrical engineering at Umm Al-Qura University, in his paper on the future of electrical energy in Saudi Arabia published in December 2022.
Financial force
Bank credit to financial and insurance activities in May also rose 29.41 percent on an annual basis to SR95.77 billion. The segment also received loans worth SR101.43 billion in March, its highest since May 2022..
The segment includes national commercial banks, branches of foreign commercial banks and firms involved in financial technology and management of cash centers.
Much of the growth in this segment can be attributed to the Kingdom’s expanding economy, which has increased demand for financial services, such as loans, investments, and insurance coverage.
Quick estimates for the first quarter of 2023 indicate that real gross domestic product increased by 3.9 percent compared to the same period a year earlier, fueled by 5.8 per growth in non-oil activities and 4.9 percent in government services.
“By leveraging favorable macro conditions and strong sector growth, Saudi banks can pursue strategic investments to grow revenues and optimize costs,” said Markus Massi, managing director of the Middle East office of Boston Consulting Group, in its recent report on the Kingdom.
SAMA has also been instrumental in driving the financial and insurance sector by creating a regulatory environment that provides stability and confidence, encouraging banks to lend to the industry.
In the first quarter, the bank launched the Open Banking Lab, enabling banks and fintech companies to develop, test and license open banking services.
Realty check
The property market has also been up, with bank credit to real estate activities increasing 29.39 percent to SR227.36 billion in May, compared to SR175.71 billion in the same month last year.
According to the NCEA classification, this segment comprises buying, selling, leasing and managing warehouses and residential and non-residential properties.
The stimulus to this growth has been spurred by a growing population, urbanization, and increased demand for housing.
This demand and government initiatives to address housing shortages and improve affordability have created opportunities for real estate companies to undertake residential projects.
“The provision of world-class housing sits at the heart of Vision 2030. With demand pivoting toward community living, there remains an opportunity to develop more town housing, which offers the privacy and outside space buyers are looking for,” said Yazeed Hijazi, associate partner, real estate strategy and consulting, Knight Frank, in its recent report on Saudi Arabia.
The overall increase in bank credit among various economic segments is a reason to cheer as it leads to increased business activity, job creation and higher production levels, contributing to economic growth and the lofty ambitions of Vision 2030.
RIYADH: As the Kingdom continues to transform both economically and socially, ushering in a host of new institutes, ministries and mega and giga-projects, a large segment in its change is growth in the private sector.
In February this year, the non-oil element of this witnessed its highest growth since 2015, with the Kingdom’s Purchasing Managers Index hitting 59.8, up from 58.2 in January.
At the helm of Saudi Arabia’s private sector growth are small and medium enterprises, with many increasingly led by the Kingdom’s women.
Saudi women ran their own businesses long before the social reforms of Vision 2030 were implemented. Yet the acceleration and growth in the sector — propelled by an increasing number of female entrepreneurs — can be largely attributed to the changes taking place in the Kingdom as it opens up to the world.
“I established my consultancy Niche Arabia over 13 years ago and now I am investing in female-owned start-ups,” Marriam Mossalli, a Saudi lifestyle editor, journalist and founder of communications agency Niche Arabia, told Arab News.
“I have been able to witness firsthand the difference in the entire process; from legal registration to even human resources and training support, through programs like Hadaf and Tamheer,” she added.
Mossalli emphasized how the Kingdom is witnessing an increase in women not just in the workforce — up from 17.4 percent to 33.6 percent in just the last five years, according to Saudi Arabia’s General Authority for Statistics — but also in the world of entrepreneurship.
“Whether it’s in tourism or technology, there are many sectors that are attractive to women and we are seeing more women take on the entrepreneurial role,” said Mossalli, adding: “Women-owned companies in the Kingdom have increased by 60 percent in the past two years.”
Mossalli says she’s focusing on the next wave of “conscious consumers coming out of Saudi Arabia from Gen Z,” and as such in September she will invest in two female-owned businesses that focus on clean beauty and fashion.
“I am investing in women,” states Mossalli. “What is exciting for me now is being able to invest in the next generation.”
According to the Brookings Institute, the female labor force participation rate in Saudi Arabia jumped 64 percent between 2018 and 2020.
This growth was of a magnitude rarely seen elsewhere in the world.
According to the report, between 2018 and 2020, the labor force participation rate of Saudi women, that is to say those working or looking for work, rose from 19.7 percent to 33 percent.
Historically, the labor female labor force participation rate for Saudi women has been low, but it increased substantially due to reforms providing more freedom and business incentives to women under Vision 2030, which is actively supporting female SMEs through various programs.
A report in 2022 by Monsha’at, the Kingdom’s official SME general authority in 2022, revealed that 45 percent of such businesses are now led by women in Saudi Arabia.
“This is concrete proof that women are leading the SME growth in Saudi Arabia and in multiple sectors from retail to the food industry and to tech,” Honayda Serafi, an esteemed Saudi fashion designer, told Arab News.
Serafi, who launched her eponymous fashion brand in 2016 and focuses on pret-a-porter and couture lines, sees her brand as a way to empower women both psychologically and also to start their own fashion businesses.
Serafi recently designed the gown worn by Saudi Rajwa Al Saif, Jordan’s future queen.
“My journey was definitely a challenging one,” Serafi said. “When I launched my brand in 2016, the Kingdom was still not yet on the line of growth of the Vision 2030. I struggled a lot because back then the Saudi fashion industry lacked everything — from raw materials, to technical information, guidance, support etc … so I started from scratch looking for external consultancy, for suppliers internationally.”
After a period of trial and error, Serafi began producing seasonal collections to exhibit in Paris, and raised an international name for the brand.
“From a marketing perspective, the public was very much interested in my story,” she said. “I am the first Saudi woman to have created an international ready-to-wear brand and to have dressed A-list celebrities in Hollywood. When I talk about the mission of the brand to empower women, I am one of those women.”
From all corners of the Kingdom, women are becoming the driving force behind Saudi Arabia’s growing SME sector.
In Baljurashi, a city in the Al-Baha region, Sharifa Algamdi has transformed her traditional home into a boutique hotel.
A retired mathematics professor, three years ago she set out to restore her family’s home, built around the turn of the century.
It was easier to refurbish it and build her business after the reforms of Vision 2030 began being implemented, as it allowed her to more freely interact with other men to buy fabrics and other goods for the home, as well as hotel guests.
Both Mossalli and Serafi emphasize that the government’s support for the growth of the private sector has led to the creation of a full accelerator body with incubators, accessible data, funding, and loan facilities to develop different sectors in the Kingdom.
Serafi is clear that the Saudi Fashion Commission — established in February 2020 — and the Ministry of Culture have led the growth of the sector.
“I have been myself part of that supporting system providing mentorship, guidance and practical assistance to the small and emerging brands,” says Serafi. “And now the announcement of the first Saudi fashion week that will not only showcase emerging Saudi brands, but also involve other industries in the Kingdom for the production of that big event.”
Ranyah Seraj, who is half-Saudi, half-Scottish, launched her platform 6th Dimension of the Arts in Riyadh in 2021, a consultancy focused on art advising, concept creation and design catering to businesses and individuals.
“Women in Saudi are super in charge, but they have been for ages,” Seraji tells Arab News.
Seraj had a previous company that she launched in 2009 before the reforms were made, but it was an entirely different process then.
“It was one of the first companies as soon as Saudi made it applicable for women to have their own registered commercial registration,” she explained, adding: “However, you still needed a male component with you in your company, even if it was registered as a sole trader.
“You needed your father, your brother, your son, your husband’s name on that — that has been abolished since then.
“Everything has changed significantly. There are hundreds of thousands of opportunities that are now available to Saudi women.
“It is really a fantastic time for Saudi women now to lead the way in entrepreneurship and business.”
How does the increasingly female driving force of SMEs in Saudi Arabia compare to its Gulf Cooperation Council neighbors?
The difference, state Saudi women, is the focus on investing and growing homegrown Saudi brands instead of relying on foreign direct investment.
As Serafi states: “Vision 2030 has set goals to achieve growth for and by the Saudi citizens, which means that the Kingdom’s economy is being constructed to rely on its local businesses, rather than depending solely on foreign investors in Saudi Arabia.
“SMEs are being pushed financially, technically and technologically, to grow beyond the Kingdom and be competitive internationally.”
It is a model that is not only empowering women, but empowering a newfound sense of Saudi pride and identity — one that works with foreign investment but seeks to identify itself for its Saudi authenticity. Women are a big part of this push.
JEDDAH: The International Islamic Trade Finance Corp., a member of the Islamic Development Bank Group, has signed a $1.4 billion financing plan with the Bangladeshi government to fund the country’s oil imports, the Saudi Press Agency reported on Saturday.
The signing took place during a recent official visit by a high-level delegation from Bangladesh to the ITFC headquarters in Jeddah.
“This financing plan will enable the Bangladesh Petroleum Company to import oil products from July to June 2024,” the statement on SPA said.
The agreement “reflects the successful long-term partnership between the two parties and will contribute to ensuring energy security for one of the fastest-growing economies in South Asia.”
It “demonstrates the corporation’s commitment to supporting the economic development of its member states and providing financing solutions that meet the needs of its customers,” the statement added.
RIYADH: Saudi Arabia and Kuwait have asserted exclusive ownership of the Al-Durra gas field in the maritime “Divided Area” after tensions with Iran rose once again in the long-running dispute over the lucrative site.
The Saudi minister of foreign affairs reaffirmed the joint ownership, calling on Iran to engage in negotiations to demarcate the eastern border of the area.
The Kuwaiti oil minister also rejected Iran’s claims over the field and urged Tehran to initiate discussions about the area.
In a statement released by the Saudi Press Agency on Tuesday, a Foreign Ministry source emphasized the natural resources in the “Divided Area” are solely owned by Saudi Arabia and Kuwait.
“We renew our previous calls for Iran to start negotiations to demarcate the eastern border of the submerged divided area between the Kingdom and Kuwait, as one negotiating party opposite the Iranian side,” the ministry stated.
Following Saudi Arabia’s declaration, Kuwait also asserted its exclusive rights over the Al-Durra gas field. According to state news agency KUNA, Kuwaiti Oil Minister Saad Al-Barrak expressed strong opposition to Iran’s planned activities in the area.
“We categorically and totally reject Iran’s planned activities around the premises of the Al-Durra offshore gas field,” Al-Barrak said,
In an interview with Asharq during the 8th Organization of the Petroleum Exporting Countries’s International Seminar, he added: “Iran must first enter into the demarcation of international borders, and after that, whoever has a right will get it according to the rules of international law.”
A source close to Kuwait’s Foreign Ministry revealed to KUNA that the “maritime area where Al-Durra offshore field lies is part of the State of Kuwait’s sea territories, and the natural resources therein are shared between Kuwait and Saudi Arabia,” dismissing any claims by Iran.
The source added: “Only the state of Kuwait and Saudi Arabia have exclusive rights to the natural resources of the Al-Durra field.”
This assertion solidifies Kuwait’s position and underscores the shared ownership between the two neighboring countries.
The dispute over the Al-Durra gas field has been ongoing for many years. In March, Kuwait and Iran held joint negotiations in Tehran, emphasizing the need to resolve the matter in accordance with international laws.
Iran’s persistence in pursuing activities in the area however adds to the complexity of the dispute and poses challenges to achieving a resolution.
The Al-Durra gas field is a common submerged area between Saudi Arabia and Kuwait located in the Arabian Gulf. It is situated within the Al-Hasa Governorate, which is a part of the Eastern Province of Saudi Arabia.
The discovery of this oil field dates back to the 1960s, which coincided with the commencement of the demarcation process for the maritime borders between Saudi Arabia and Kuwait.
• 1967 Al-Durra gas field discovered.
• 2013 Talks stall between Saudi Arabia, Kuwait and Iran.
• 2019 Saudi Arabia and Kuwait resume production from Neutral Zone fields.
• 2022 Saudi Arabia and Kuwait sign MoU to invest in Al-Durra gas field.
• 2023 Resources in Neutral Zone confirmed to be fully owned by Saudi Arabia and Kuwait.
The ownership of the field was evenly divided between the two countries, becoming effective in 1970.
The gas field is one of the largest in the world with abundant natural gas reserves.
It is expected to produce 1 billion cubic feet of gas daily and 84,000 barrels per day of condensate, and plays a significant role in Saudi Arabia and Kuwait’s gas production.
The Al-Durra oil field’s strategic importance and the potential wealth it holds have attracted the attention of neighboring countries, particularly Iran.
The dispute over its ownership and exploitation rights arises from differing interpretations of maritime boundaries and conflicting claims by Tehran.
In 2001, Iran began granting contracts for its exploration, which prompted Saudi Arabia and Kuwait to finalize the demarcation of their maritime borders, which included the Al-Durra oil field.
Despite objections from Iran, Saudi Arabia and Kuwait signed an agreement in 2022 to jointly develop and explore the field.
IN NUMBERS
• 1 billion cubic feet estimated daily gas production.
• 84,000 barrels estimated daily production of liquefied natural gas.
The controversies surrounding the operations escalated following Iran’s announcement in June that it was prepared to commence drilling in the Al-Durra gas field.
Mohsen Khojsteh Mehr, the managing director of the National Iranian Oil Co., indicated that Iran is allocating sizeable resources for exploring the site.
“Considerable resources have been allocated to the board of directors of the National Iranian Oil Co. for the implementation of the development plan for this field,” said Mehr, according to Iranian state media.
Despite attempts at negotiations and agreements between Kuwait, Saudi Arabia, and Iran, a definitive resolution to the dispute has remained elusive, leading to ongoing tensions and disagreements in the region.
The competing claims and Iran’s readiness to begin drilling in the Al-Durra field further exacerbate the tensions in the region.
As the situation unfolds, it remains to be seen whether diplomatic negotiations or other means will be employed to reach a mutually agreeable resolution between the concerned parties.
RIYADH: Red Sea Global has announced the installation of 750,000 solar panels in a huge boost for the development’s sustainability drive.
The giga-project has also constructed five solar stations as it gears up for the first phase of its opening, which will see 16 hotels, retail, and entertainment venues come online and powered entirely by renewable energy.
RSG is also implementing the world’s largest battery storage facility at a capacity of 1,200 megawatts per hour, which will enable the company to achieve 100 percent grid independence.
The tourist destination is set to operate 50 resorts by 2030, with up to 8,000 hotel rooms and over 1,000 residential buildings spread across 22 islands and six inland areas.
Along with the giga-project of NEOM, RSG has put sustainability as a key tenet of its development, in line with Saudi Arabia’s target to reach net-zero for carbon emissions by 2060.
John Pagano, the CEO of RSG, said ensuring that the world’s largest tourism destination is fully powered by renewable energy falls within such commitment, according to the Saudi Press Agency.
Pagano added that the installation of electroluminescent panels at the five solar stations had been completed as part of the first phase of the Red Sea Project, and the complete independence of the venture from the national grid makes it not only the largest, but also the first of its kind in the world.
All vehicles transporting visitors to the Red Sea Tourism Project will be fully powered by solar energy, starting with their arrival at the Red Sea International Airport and continuing through their movements within the sites and between the nearby islands.
According to the SPA, RSG is also investing in human capital, and has provided vocational training scholarships to 500 people in cooperation with the Human Resources Development Fund, of which 50 people have received training in renewables.
The company aims to provide specialized training to a total of 10,000 Saudi citizens by 2030.
Alongside this, RSG is working to ensure half of its workforce are Saudi nationals.
In May, while speaking to Arab News on the sidelines of Arabian Travel Market 2023 in Dubai, Tracy Lanza, global head of brand development at RSG, revealed the company was edging closer to hitting that target.
“The goal is 50-50 and we are nearly there, and I can say from a marketing standpoint, our team is at 67 percent and growing. We also have the largest percentage of Saudi women, I think, at the company,” said Lanza.