Gulf industrialization potential gains traction

Al-Monitor Pro Members

Sebastian Castelier

Business journalist covering Gulf economies

June 15, 2023

China’s Baoshan Iron & Steel, a subsidiary of the world’s biggest steelmaker China Baowu Steel Group, announced in May that it will build a $4 billion steel plates plant in Saudi Arabia. The global push to decarbonize supply chains and the rise of a multipolar world is an opportunity for the Gulf to emerge as an energy-rich industrial hub equidistant from Asia, Africa and Europe. It is a $300 billion foreign direct investment opportunity in the short-term, consultancy Strategy& estimated. But that requires overcoming historic roadblocks to industrialization. In 2019, Japan’s carmaker Toyota rebuffed Riyadh’s courting after it concluded that “production costs will be similar to other countries only if there is a 50% government incentive."