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Outside Investment Could Connect the Red Sea Region and Boost Global GDP

01 Jan, 2019

The 20 countries that make up the Red Sea Region are experiencing phenomenal growth.

The region is one of the fastest-growing, yet underexploited, emerging markets in the world, according to KAEC Group CEO and Managing Director Mr. Fahd bin Abdul Mohsen Al-Rasheed.

The United Nations estimates that in the next 20 years, the population of the Red Sea Region will increase from 620 million to 1 billion people. The Brookings Institute reports the GDP in the region is also expected to grow from $1.8 trillion today to $6.1 trillion by 2050, with trade increasing from $881 billion today to $4.7 trillion by 2050.

But most countries in the Red Sea Region will not directly benefit from this growth. In fact, more traffic will create a need for improved logistics connectivity, which countries along the Red Sea Corridor are not prepared to meet.

As a gateway to the broader Red Sea market, the Kingdom of Saudi Arabia has already laid the foundation for an efficient trade infrastructure. King Abdullah Port (KAP) at Industrial Valley in KAEC is one of the largest and most advanced seaports in the region, and the first deep-sea port in the region to be developed entirely with private sector investment.

Covering more than 14 million sqm, King Abdullah Port is a key part of KAEC’s integrated multi-model transportation system that connects the road networks, the high-speed Haramain railway, and the planned connection to the Saudi Land Bridge via the Industrial Valley.

The Kingdom could offer access to the entire population of the Red Sea Region if the trade infrastructure were in place to facilitate it but doing so would require a significant coordinated effort.

KAEC has a Master Plan in place that, should it be completed, would enable the port to accommodate 30 deep-water berths that can handle mega vessels with a capacity of 20 million TEU.

The impact of investing in and building a more efficient trade infrastructure to connect the Red Sea Region can expand KAEC’s market reach and attract more investors, companies, residents, and tourists. The opportunity presents enormous potential to increase GDP growth to as much as $6.6 trillion by 2050.

Trade could increase by $1.6 trillion over current estimates. The initiative would increase export diversity and improve the flow of goods throughout the Red Sea Corridor. The potential is there to make trade easier, faster, and more profitable. Improved logistics connectivity will transform the Red Sea region into a growth engine with global impact.

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