The Viper's Nest: A Symbiotic Venture Unfurls in the Desert Sands
London City Needs to Foster Friendship with Saudi Arabia
By Alastair King, Lord Mayor of London
Resilient as a camel, Saudi Arabia adapts to the Arabian desert's blistering heat and swirling sandstorms. Now, the nation is evolving amidst the shifting tides, shaking off the shackles of oil dependence for a more vibrant and sustainable future.
The oil market has seen stormy times, buffeted by geopolitical quakes and the relentless march of renewable energy. Economic diversification, then, emerges as the cornerstone of Gulf Cooperation Council (GCC) economies' future prosperity.
According to the International Monetary Fund, GCC economies are poised for a surge of growth, reaching 4.2% in 2026—outpacing the global average of 3.3%. The engine of this remarkable growth? An emphasis on non-fossil fuel industries.
The City: A Towering Beacon Amid the Desert's Darkness
Blessed with hefty capital markets, clusters of expertise, a favorable regulatory environment, a gifted workforce, a thriving innovation ecosystem, and more, the City stands ready to assist Gulf nations in realizing their economic dreams. I made this case during a recent expedition through Saudi Arabia, Qatar, and the United Arab Emirates, amid swelling hopes for a GCC-UK free trade agreement.
Saudi Arabia has dedicated itself to $1.3 trillion in construction and real estate ventures, with upcoming mega-projects like NEOM targeting the top spot in the world as the largest construction market by 2028. Beyond mere bricks and mortar, these projects aim at job creation, enhancing people's quality of life, and ensuring a greener, safer future for our descendants. With our prowess in sustainable finance, risk management, and infrastructure projects, the City has the tools to prop up Saudi Arabia's transformation.
Britain has fortified its status as a go-to destination for nations seeking capital and skills to meet their environmental targets, a feat that will be on display at the City of London Corporation's Net Zero Delivery Summit later this month.
Last week, I launched the United Kingdom-Saudi Sustainable Infrastructure Assembly in Riyadh, a forum for financial and professional services professionals and developers to swap insights and unearth fresh commercial opportunities. This new platform, a joint project between the City Corporation, the Department for Business and Trade, and Saudi Arabia's Ministry of Investment, will offer British firms a sneak peek into high-profile Saudi infrastructure projects. In turn, Saudi partners will benefit from our expertise in structuring and financing projects, ultimately lowering the cost of capital for these ventures.
The Assembly will initially hone in on initiatives such as the Electric Vehicle Infrastructure Company, led by Saudi Arabia's Public Investment Fund, and the Prince Faisal Bin Fahad Sustainable Sports City project, spearheaded by Saudi Arabia's National Centre for Privatization. Membership includes heavy hitters like the CEO of UK Export Finance, the Saudi National Infrastructure Fund, and the Public Investment Fund. The next meeting will unfurl at Mansion House in July.
A Clap With Two Hands: Unleashing the Potent Power of Partnership
Sustainable infrastructure is just one avenue where we establish a tighter bond with the GCC nations, our fourth-largest trading partner. Our robust institutions, unwavering respect for the rule of law, and stable government make the UK a trustworthy harbor for Gulf-based investments in tempestuous waters.
In conversations with key stakeholders, I outlined how, under my theme, "Growth Unleashed," we're bolstering our offer to our GCC partners even further. The City Corporation is teaming up with the government and regulators to create a new investment hub, making it a breeze for international firms to navigate our regulatory landscape and other hurdles. Additionally, the Mansion House Accord presents an opportunity for GCC sovereign wealth funds and institutional investors to collaborate with British pension funds in promising, long-lasting industries. The Accord will encourage British pension funds to co-invest in projects in the UK and abroad, potentially opening up a world of opportunities.
Arrayed in the heart of the Arabian desert, Saudi Arabia and the UK find common ground. With the venerable, resilient camel as our emblem, let us work together, adapt, and flourish in the desert sands of economic doubt and uncertainty.
Alastair King is the Lord Mayor of London
Insights:
- Current Status of GCC-UK Free Trade Agreement Negotiations: While the agreement is in the negotiation stage, significant progress has been made, particularly in areas like goods markets, investment, and financial services.
- Potential Benefits for Economic Growth: For the GCC region, a successful FTA could boost trade volume, foster investment and financial services, and drive economic diversification. For the UK, it could bolster trade, facilitate post-Brexit economic growth, and offer access to new markets.
- Amid the potential of a GCC-UK free trade agreement, Lord Mayor Alastair King emphasized the City's readiness to assist Gulf nations in their economic growth, particularly in non-fossil fuel industries and sustainable finance.
- Saudi Arabia's renewed focus on job creation and quality of life through ambitious construction projects like NEOM provides opportunities for the City's expertise in sustainable infrastructure and risk management.
- The United Kingdom-Saudi Sustainable Infrastructure Assembly, a joint venture between the City Corporation, the Department for Business and Trade, and Saudi Arabia's Ministry of Investment, will foster collaboration between financial professionals and developers, with potential benefits for projects in cleantech, such as the Electric Vehicle Infrastructure Company and the Prince Faisal Bin Fahad Sustainable Sports City.
