Business & Money | Wednesday 1 November, 2017 6:27 am |

The International Monetary Fund (IMF) has endorsed an ambitious Saudi Arabian plan to build a $500-billion business and industrial zone extending into Jordan and Egypt, saying the project could benefit the whole region.

Jihad Azour, head of the IMF’s Middle East department, said the plan to develop the zone, known as NEOM, could stimulate trade and allow the Middle East to capitalize on its location as a bridge between Asia and Europe.

“It is a signal that greater regional cooperation is back on the table,” he said. “We see value and necessity in regional cooperation.”

The NEOM scheme, unveiled by Crown Prince Muhammad Bin Salman, deputy premier and minister of defense, at an international conference in Riyadh last week, would develop industries such as energy and water, biotechnology, food, advanced manufacturing and entertainment in a 26,500-sq-km (10,230-sq-mile) zone.

The project has been welcomed by Jordanian officials.

Saudi Arabia has indicated that much of the huge cost of the zone will be borne by the Saudi government, but a large, though undisclosed, portion would come from domestic and international private investors.

Azour said major private sector participation would be important for NEOM’s success, with the Saudi government providing land and regulation rather than trying to be closely involved in most investment decisions.

“Authorities in various countries are now reassessing more and more the need to do reforms and projects to grow faster and to address the issue of job creation,” he said.

An IMF study published on Tuesday suggested the Middle East and North African region could add 1 percentage point to its average economic growth over five years by participating more actively in international trade and removing barriers to cross-border commerce.