KING ABDULLAH ECONOMIC CITY – The Red Sea has played a pivotal role in global trade for millennia. In the time of the pharaohs, it was at the heart of the global spice trade. Today, it is an essential global artery, feeding Western demand for hydrocarbons and facilitating the flow of goods between Europe and booming Asian markets. More than 10% of world trade moves through the Red Sea basin every year, a figure that is set to increase as Egypt doubles the capacity of the Suez Canal.
And yet, with a few exceptions, most of the modern wealth generated by that trade sails rapidly onward, leaving little to show for its passage. There is no reason that should continue to be the case. A regional effort to facilitate trade and build infrastructure has the potential to reposition the countries surrounding the Red Sea as destinations for global investment and international trade.
The Red Sea region, comprising the 20 countries that use the route as their primary trading corridor, is the largest, fastest-growing, and least exploited emerging market in the world. Over the next 35 years, the United Nations expects the region’s population to rise more than twofold, from 620 million today to 1.3 billion. This population growth will be accompanied by one of the world’s highest urbanization rates, creating a burgeoning middle class, which the Brookings Institution estimates will grow from 136 million today to 343 million by 2050.
Over the same period, according to current projections, the region’s GDP will triple, from $1.8 trillion to $6.1 trillion, while trade will increase fivefold, from $881 billion to $4.7 trillion.