This, the 22nd edition of our StratEGIC Monthly, looks at some of the key issues defining the Euro-Gulf space in November and December 2023 and focuses on some of the main political, economic and social issues that define their trajectory and underline the possible future of the global geopolitical balance.

November 2023

Oman’s Tourism Implementation in 2023

By Daniela Palumbo

Oman has traditionally played an intermediary role in regional geopolitics. The recent influx of 3 million tourists in 2023 marks a pivotal moment in the direction the country is beginning to take, with several implications that go beyond the tourism industry.(1) This surge in visitors presents a new set of circumstances not yet faced by the Sultanate.

Positive experiences of tourists testifies to Oman’s strength, potentially enforcing international perceptions and fostering its diplomatic relations. Oman, like the other GCC countries, has actively sought to diversify its economic base. Tourism offers an important mechanism for such diversification and can contribute to create a greater economic stability by enabling Oman to resist the fluctuations of the global oil markets and to reinforce their financial resilience.

As millions of visitors arrive from different parts of the world, Oman becomes a hub of cultures and influences. This underlines an opportunity for cultural exchange and for interpersonal ties, promoting stronger partnerships with the countries from which tourists come, for instance, on visa issues. With increases in tourism, both security and infrastructure — necessary to accommodate huge influxes — also become crucial. Infrastructural development must move ahead to offer tourists a pleasurable experience without compromising local resources or existing security protocols. Yet, the influx of tourists may also bring challenges—such as preserving local identities and managing cultural clashes, so balancing the benefits of tourism and preserving Oman’s unique identity and heritage is essential. To ensure this happens, it is necessary to mitigate environmental impacts and manage over-tourism in sensitive areas, which requires detailed planning and governance. Oman’s growing importance as a tourist destination elevates its strategic importance in global diplomacy and increases its visibility on the world stage which may, in turn, may encourage foreign investments and, generally, enhance Oman’s global standing.

DEWA’s New Sustainable Initiatives Post-COP28

By Daniela Palumbo

The Dubai Electricity and Water Authority (DEWA) has emerged as a lighthouse of sustainable progress following COP28 and demonstrating a formidable commitment to advancing the COP’s global goals and its main purpose—to help emphasise the urgency in mitigating climate change and take action in the shortest possible time for its impact to be changed and improved. As the world struggles with the imperatives of climate action, DEWA’s innovative initiatives testify Dubai’s dedication to environmental protection and sustainable development. In the wake of COP28, where world leaders met to address pressing climate challenges, DEWA quickly took action aligning its strategies with the ambitious goals outlined during the summit. With a strong focus on carbon neutrality, renewable energy integration and water conservation, DEWA has become a major supporter for the practical implementation of the COP resolutions. DEWA’s pursuit of renewable energy sources has become a cornerstone of its commitment to sustainability, in particular through ambitious solar projects such as the Mohammed bin Rashid Al Maktoum Solar Park, which underlines Dubai’s commitment to moving towards a greener and more sustainable energy mix.(2) DEWA continues to drive progress that not only reduces its carbon footprint, but also optimises resource utilisation in the energy and water sector.

An important feature of DEWA’s approach is that it manages to extend beyond local impacts through active collaboration with global partners that foster the exchange of knowledge in all fields, including technology, and promote the sharing of best practices to strengthen Dubai’s position as a global hub for sustainable innovation and promote a ripple effect that extends far beyond its borders. Despite this, it recognises the importance of its borders and has encouraged this through the enhancement of community involvement, placing significant emphasis on raising awareness of sustainable practices among its citizens. Through educational initiatives, public campaigns and inclusion programmes, DEWA enables individuals and businesses to adopt sustainable lifestyles and contribute to the broader climate action agenda.(3) Of course, challenges persist. Balancing economic growth with sustainability goals, ensuring inclusion in green initiatives and keeping infrastructure demands in line with the environmental objectives are a few. However, these obstacles offer a new opportunity to face the reality and to handle the innovation and the collaboration in other ways. Indeed, as the world struggles with the urgency of climate action, DEWA stands as a testament to the power of proactive initiatives and partnerships in driving meaningful changes towards a more sustainable and resilient future.

Quiddiya City: Saudi Arabia’s Move to Lead the Global E-Sports Revolution

​by Piercamillo Falasca

In a bold initiative to position itself as a global gaming hub, Saudi Arabia is undertaking a substantial investment in the electronic sports (e-sports) industry. The strategy involves creating an extensive e-sports district located outside Riyadh, called Quiddiya City, an area of 500,000 square metres, featuring 30 video game companies, 25 e-sports teams, and four cutting-edge e-sports arenas. One of these stadiums will provide an immersive gaming experience, enabling visitors to fully engage with the action through their senses.

The district also plans to welcome up to 10 million visitors annually by 2030. While the exact budget for this project remains undisclosed, Saudi Arabia is dedicated to allocating nearly $40 billion, aiming to become a prominent player in the $184 billion gaming market by 2030. This substantial investment forms part of a broader initiative to diversify the country’s economy, evident in the sovereign wealth fund’s acquisition of minority interests in major gaming companies and e-sports organisations. Gaming has become a global business, gaining traction since the onset of the Covid pandemic in 2020, with new-age technology providing an opportunity to reach a wider audience not only as entertainment but also as tools used by companies worldwide for job training, or by universities and schools. Experts argue that Saudi Arabia’s foray into the gaming industry is well-timed, particularly amidst ongoing geopolitical turmoil. This strategic investment has the potential to positively influence the country’s overall foreign policy standing. The sovereign wealth fund has strategically amassed a portfolio of minority stakes in major gaming companies, procured e-sports organisations, and earmarked funds for additional investments in the gaming sector. This investment is viewed as a tactical manoeuvre to bolster the country’s political influence and foreign policy endeavours.

On 29 December, the official gazette Umm Al-Qura published regulatory frameworks for the Saudi Electronic Games and Sports Authority. This authority seeks to oversee the e-sports sector, enhancing its position, sustainability, and appeal while addressing its challenges. The authority, which is structurally connected to the Prime Minister Mohammed bin Salman (a notorious gamer himself), possesses legal and financial independence within Saudi legal framework. It will formulate draft laws and regulations, supervise the sector’s strategic implementation, develop standards and procedures, issue licenses for organising e-games and sports events, gathers and analyses sector data, establish a database, and collaborate with relevant entities both inside and outside the country.

Disruptive Overland Trade: Trucknet’s Game-Changing Solution in the Middle East

By Piercamillo Falasca

Trucknet Enterprise, an Israeli smart transportation company, has recently entered into agreements to establish an overland trade route for the movement of goods from the Gulf through Saudi Arabia and Jordan to Israel, bypassing the Red Sea waterway, which is currently susceptible to attacks by Iranian-backed Houthi militants. Trucknet garnered attention in the Middle East when, in early December 2023, company managers announced they had found a solution to the Houthi threat. Based in Eilat, the company revealed plans to operate a special transport land bridge, requiring permission from the Ministry of Defence. This bridge would facilitate the movement of goods from Dubai Port to Haifa Port using convoys of trucks traveling through the UAE, Saudi Arabia, and Jordan to Israel and back. Leveraging its technology, Trucknet acts as a digital marketplace, connecting importers with transport companies to reduce costs and optimise goods occupancy on trucks. A strategic agreement with UAE logistics company Pure Trans enables Trucknet to transport containers from Emirati or Bahraini ports to Haifa Port. The company’s platform facilitates the identification of exporters willing to fill the same container for its return journey to the Gulf.

Trucknet’s announcement generated considerable attention in the Arab world, especially due to its discussion of goods passage to Israel through Arab countries amid the conflict in Gaza, garnering extensive coverage in Arab media. It is essential to note that Trucknet did not pioneer the land transport route between Dubai and Bahrain to Israel, which existed even before the signing of the Abraham Accords. However, Trucknet has capitalised on its network of connections with shipping companies, allowing customers to transport the same container from Dubai to Israel seamlessly, while other transport companies often face the hassle of transferring contents at border points. Under normal circumstances, the land bridge might not be more cost-effective for importers compared to the route through the Red Sea and the Suez Canal. Presently, the cost of fuel for a truck journey from the UAE to Israel is approximately $3,200 and around $2,200 from Bahrain. Additional expenses include toll fees of $300 in Saudi Arabia, $300 in Jordan, and another $70 in Israel, along with port costs of about $400 per container in the Gulf and Israel. Moreover, there are extra shipping costs from the countries of origin, such as China or India, ranging between $200 and $1,600. Consequently, a container traveling from Shanghai to Haifa through trucks may cost about $5,800 via the UAE or $4,800 via Bahrain.

In normal circumstances, transporting a container from China to Israel via maritime routes costs approximately $1,200-1,500, making the recent $7,000 price an anomaly. However, truck transportation overland takes only about four days between Dubai and Haifa and two days from Bahrain, saving ten days of travel time. This makes it a viable option for cargos directed to the Mediterranean and Europe where speed of arrival is crucial.