WEBVTT - Dudley on Powell, Saudi Arabia Tourism, Megapass Skiing 0:00:12.640 --> 0:00:15.360 This is Wall Street Week. I'm David Western bringing you 0:00:15.520 --> 0:00:19.639 stories of capitalism. Saudi Arabia's Vision twenty thirty project to 0:00:19.680 --> 0:00:23.320 reshape its economy has a deadline only four short years away. 0:00:23.880 --> 0:00:26.200 We go to the Kingdom to see how it's coming on. 0:00:26.239 --> 0:00:31.040 An important part of the plan, tourism plus Israel's startup 0:00:31.160 --> 0:00:33.680 nation has been put to the test with the Warren Gaza. 0:00:34.080 --> 0:00:38.000 Has the conflict slowed down the tech juggernaut or actually 0:00:38.040 --> 0:00:41.600 sped it up? And more people want to ski, but 0:00:41.680 --> 0:00:45.360 they need snow and access to big mountains. We explore 0:00:45.400 --> 0:00:48.840 the pluses and minuses of one possible solution, so called 0:00:49.080 --> 0:00:54.000 Big Ski. But we start with the story of the 0:00:54.040 --> 0:00:57.600 week for the Federal Reserve with Chair J. Powell reacting 0:00:57.760 --> 0:01:01.440 forcefully to a grand jury subpoena looking into his testimony 0:01:01.600 --> 0:01:04.760 about renovations in the Fed's DC office building. 0:01:05.319 --> 0:01:08.000 The threat of criminal charges is a consequence of the 0:01:08.040 --> 0:01:12.160 Federal Reserve setting interest rates based on our best assessment 0:01:12.280 --> 0:01:15.080 of what will serve the public, rather than following the 0:01:15.120 --> 0:01:19.920 preferences of the President. Public service sometimes requires standing firm 0:01:20.000 --> 0:01:23.160 in the face of threats. I will continue to do 0:01:23.240 --> 0:01:26.880 the job. The Senate confirmed me to do with integrity 0:01:27.120 --> 0:01:29.520 and a commitment to serving the American people. 0:01:30.800 --> 0:01:34.039 Everyone from central bankers around the world to several Republican 0:01:34.080 --> 0:01:38.520 senators condemned the move, including Senior Senate Banking Committee member 0:01:38.680 --> 0:01:41.800 Tom Tillis, who spoke with Bloomberg on Capitol Hill. 0:01:42.440 --> 0:01:45.800 If suddenly the threat of a lawsuit can take a 0:01:45.880 --> 0:01:48.560 chair out of play, how can anybody think that that's 0:01:48.600 --> 0:01:51.800 anything more than a de facto ending the independence of 0:01:51.800 --> 0:01:53.400 the FED. And we all know what that does to 0:01:53.480 --> 0:01:58.360 markets worldwide. I will block any effort to name any 0:01:58.600 --> 0:02:02.680 member of the FED board until this matter is resolved. 0:02:02.720 --> 0:02:06.120 To move on would almost validate that this is a 0:02:06.160 --> 0:02:09.000 way that you can actually get the FED under heel. 0:02:09.600 --> 0:02:12.440 Bill Dudley is former president of the New York Fed 0:02:12.680 --> 0:02:15.760 and now a Bloomberg contributor. There was a lot of 0:02:15.800 --> 0:02:19.040 reaction to the news that there was a grand jury 0:02:19.080 --> 0:02:22.880 subpoena against the Federal Reserve and Chair Powell. A lot 0:02:22.880 --> 0:02:28.360 of reaction by politicians by the news media. There wasn't 0:02:28.400 --> 0:02:31.760 as much reaction actually in the markets. So is one 0:02:31.760 --> 0:02:33.040 of them right and one of them wrong? 0:02:33.760 --> 0:02:37.080 Well, time will tell, but I think the market view 0:02:37.160 --> 0:02:40.880 is Look, the issue is subpoena. It's a long way 0:02:40.880 --> 0:02:44.119 from issuing a subpoena to actually having a grand jury, 0:02:44.160 --> 0:02:48.440 indictment a trial, and that's going to take so long. 0:02:48.880 --> 0:02:51.360 Paul is already longer going to be Chair. So I 0:02:51.360 --> 0:02:53.520 think the market view is this is sort of a 0:02:53.560 --> 0:02:54.600 lot of noise. 0:02:54.880 --> 0:02:57.720 So it may not have the effects in the real world. 0:02:57.840 --> 0:03:02.880 But Chair Powell, who had repeatedly just sloughed off christ 0:03:02.919 --> 0:03:05.440 as the lass, had an entirely different reaction. It was 0:03:05.440 --> 0:03:07.920 a very I thought, forceful statement that he take. 0:03:07.960 --> 0:03:08.640 Oh very much so. 0:03:08.800 --> 0:03:11.360 And the contrast was how he behaved previously, where he 0:03:11.440 --> 0:03:12.960 was basically I'm not going to engage. I'm not going 0:03:13.000 --> 0:03:15.160 to engage, and this time he said, no, you crossed 0:03:15.160 --> 0:03:18.680 the line. You're accusing me of malfeasance and I'm not 0:03:18.720 --> 0:03:20.680 going to take it. And so I think it because 0:03:20.880 --> 0:03:23.000 because he was so measured before, this made it even 0:03:23.040 --> 0:03:23.679 more effective. 0:03:23.919 --> 0:03:27.040 So you've been in the room and whenever we ask 0:03:27.120 --> 0:03:29.480 somebody who's on the FED, they say, oh, no, no, 0:03:29.520 --> 0:03:31.840 we paid no attention to politics all absolutely not. Doesn't 0:03:31.840 --> 0:03:34.600 affect us. But you are human beings. I mean, it 0:03:34.720 --> 0:03:36.760 must play in the back of your mind somewhere, even 0:03:36.800 --> 0:03:38.120 if it's not discussed in the meeting. 0:03:39.040 --> 0:03:41.600 Look at the federals or transcripts of all the FMC 0:03:41.720 --> 0:03:44.920 meetings released lag of five years, and you won't see 0:03:44.960 --> 0:03:49.080 any discussion about political consideration. So I think that's actually true. 0:03:49.320 --> 0:03:51.640 But you know, you're certainly right in the sense that 0:03:51.720 --> 0:03:55.040 if the administration is putting tremendous pressure on the FED 0:03:55.080 --> 0:03:57.760 to do something, that makes it a little bit more 0:03:57.760 --> 0:04:01.800 difficult for the FED to deliver what the administration actually 0:04:01.840 --> 0:04:05.119 wants because it creates the idea of are they doing 0:04:05.120 --> 0:04:07.160 it because they think this is appropriate for the economy, 0:04:07.600 --> 0:04:10.840 or are they caving to the administration's pressure. So I 0:04:10.880 --> 0:04:13.840 think that's why it's actually counterproductive what they're doing. I 0:04:13.840 --> 0:04:15.880 can imagine Powell like thinking, should I do one more 0:04:15.920 --> 0:04:18.600 ray cut or not? Boy, Now, if I do a 0:04:18.680 --> 0:04:21.719 ray cut, it looks like I'm bending to this pressure. 0:04:22.279 --> 0:04:24.240 Maybe I better hold off. So it's actually making it 0:04:24.240 --> 0:04:25.640 more difficult for the feder cut rates. 0:04:25.640 --> 0:04:29.360 Frankly, as you say, chair pole is terribly up. In May, 0:04:29.640 --> 0:04:34.080 there will be a new FED chair. How much difference 0:04:34.640 --> 0:04:36.719 will the chair make in themselves? 0:04:36.800 --> 0:04:40.680 I think the chair is certainly important because one they 0:04:41.080 --> 0:04:45.240 control the agenda, the boards, Board of Governor's staff works 0:04:45.279 --> 0:04:49.120 mainly for the chairman, so that's a lot of authority. 0:04:49.680 --> 0:04:51.440 But at the end of the day, in terms of 0:04:51.480 --> 0:04:52.279 the votes. 0:04:52.080 --> 0:04:54.240 On the Federal Open Market Committee, the chair only has 0:04:54.279 --> 0:04:56.640 one vote, and so I think the influence of the 0:04:56.680 --> 0:05:01.360 chair really depends in part on how credible that person 0:05:01.440 --> 0:05:03.640 is in terms of making the case for the monetary 0:05:03.680 --> 0:05:06.920 policy that he wants to see implemented. So if someone 0:05:06.920 --> 0:05:09.279 comes in and says we should cut one hundred basis 0:05:09.320 --> 0:05:13.440 points and the economy doesn't suggest that that's appropriate, the 0:05:13.440 --> 0:05:15.640 committee is going to say, well, that's what you think, 0:05:15.680 --> 0:05:18.320 but we're going to dissent against that, and that's really 0:05:18.440 --> 0:05:20.120 you know, that would actually be quite bad for the 0:05:20.200 --> 0:05:22.880 chairman if the Chairman serve of lost a vote to 0:05:23.320 --> 0:05:25.560 the rest of the committee. So I think there's quite 0:05:25.560 --> 0:05:28.640 a few guardrails there. I think the broader question is 0:05:28.680 --> 0:05:31.839 can the Trump administration put enough loyalists into the Federal 0:05:31.880 --> 0:05:35.760 Reserve So it's not just the chairman, it's a majority 0:05:35.760 --> 0:05:38.680 of voting members of the Federal Open Market Committee. And 0:05:38.720 --> 0:05:40.640 that's why the LEAs of Cook case is so important, 0:05:40.920 --> 0:05:43.080 because if leeds a Cook can be dismissed for cause, 0:05:43.120 --> 0:05:45.039 So then maybe other people can be dismissed for cause 0:05:45.080 --> 0:05:47.880 and then you get a much more rapid turnover of 0:05:48.040 --> 0:05:51.279 the Board of Governors. Board of Governors has seven votes 0:05:51.279 --> 0:05:54.160 on the FMC. The presidents have five, So if you 0:05:54.200 --> 0:05:56.360 could take over the Board of Governors, you could actually 0:05:56.360 --> 0:05:58.520 start to get the monetary policy you wanted. 0:05:58.839 --> 0:06:00.800 From the outside, the job of Chair of the Federal 0:06:00.839 --> 0:06:05.080 Reserve looks pretty hard for anyone anytime. Is President Trump 0:06:05.120 --> 0:06:08.560 making it harder for the next chair with what he's 0:06:08.600 --> 0:06:10.599 saying and doing, including his grand jury subpoena? 0:06:10.760 --> 0:06:12.719 Yeah, I think he is, because I think it's it's 0:06:13.200 --> 0:06:14.840 when the new chair comes in, people are going to 0:06:14.880 --> 0:06:18.640 be wondering, so are you President Trump's lackey or are 0:06:18.680 --> 0:06:21.560 you going to be on the side of independent monetary 0:06:21.560 --> 0:06:24.080 policy based on what the economy calls for in terms 0:06:24.080 --> 0:06:28.000 of inflation, unemployment, what what what interest rate? Pastoul we 0:06:28.080 --> 0:06:31.280 follow And so there's gonna be a question about are 0:06:31.320 --> 0:06:34.800 you supporting the idea of an independent central bank or not? 0:06:34.920 --> 0:06:37.359 And so the new incoming chair is caught in a 0:06:37.440 --> 0:06:40.800 very difficult place. Frankly, I mean it's almost like they're 0:06:40.800 --> 0:06:43.760 going to get someone mad at them if they if 0:06:43.800 --> 0:06:47.320 they side on the side of independence of Monterrey. Pauls 0:06:47.360 --> 0:06:49.880 let's set the right monetary policy. That might run into 0:06:49.960 --> 0:06:52.400 conflict with the president. And obviously if he tries to 0:06:52.400 --> 0:06:55.360 push the president's agenda and the and the FMC thinks 0:06:55.400 --> 0:06:57.440 that's inappropriate, then he's going to get out on the 0:06:57.480 --> 0:07:00.320 wrong side of the FMC. So I wouldn't want to 0:07:00.320 --> 0:07:01.039 be the new chair. 0:07:01.120 --> 0:07:04.000 Frankly, it strikes me when it comes to the Supreme Court, 0:07:04.680 --> 0:07:06.800 the President typically goes out of his way to say 0:07:06.880 --> 0:07:09.120 I didn't ask, for example, how they would vote on 0:07:09.160 --> 0:07:11.320 this particular issue. I didn't ask that question of ask. 0:07:11.680 --> 0:07:14.240 I'm not sure President Trump would have the same reticence 0:07:14.320 --> 0:07:17.240 with the next FED chair of not asking them specifically, 0:07:17.240 --> 0:07:17.960 what are you going to do? 0:07:18.800 --> 0:07:21.120 I wouldn't be surprised if you asked them what to do. 0:07:21.200 --> 0:07:22.520 And I think if I was a FED schaer, I'd 0:07:22.560 --> 0:07:25.640 say it depends on the incoming economic data and what's 0:07:25.680 --> 0:07:28.520 wanted to keep the economy on a smooth clude path. 0:07:28.920 --> 0:07:31.680 I mean, look, I think President Trump, you know, is 0:07:31.680 --> 0:07:34.480 coming at it from a real estate development perspective, and 0:07:34.560 --> 0:07:37.680 which is lower rates are always good. But the reality 0:07:37.800 --> 0:07:40.680 is lower rates aren't always good, because if you set 0:07:40.760 --> 0:07:42.480 rates too low, the economy will overheat and you'll have. 0:07:42.480 --> 0:07:43.120 An inflation problem. 0:07:43.160 --> 0:07:45.560 It's sort of ironic in an environment where people are 0:07:45.560 --> 0:07:49.000 worried about affordability that inflation is the thing that really 0:07:49.080 --> 0:07:52.040 resonates with voters that you're pressing so hard for lower 0:07:52.080 --> 0:07:54.679 interest rates, which would actually probably make inflation worse. 0:07:55.400 --> 0:07:58.120 President Trump has said repeatedly I have the right to 0:07:58.160 --> 0:08:00.640 express my views. I think I'm pretty sure this, and 0:08:01.320 --> 0:08:02.800 there is a first men right. Even with the resident 0:08:02.840 --> 0:08:06.720 United States expressive views. Is there a point where that 0:08:06.760 --> 0:08:09.480 expression of views actually starts to do long term damage 0:08:09.520 --> 0:08:10.200 to the institution. 0:08:10.920 --> 0:08:13.600 I think how it depends on how you're expressing the 0:08:13.680 --> 0:08:15.920 point of view. You could say, my view is that 0:08:15.960 --> 0:08:19.400 the federshar Raser should interest rates more. Fine, that's just 0:08:19.440 --> 0:08:22.760 an impression of view. Powell is an idiot. He better 0:08:23.280 --> 0:08:25.640 lower interest rates by one hundred basis points or I'll 0:08:25.680 --> 0:08:28.440 fire him. That's a totally different expression of a point 0:08:28.440 --> 0:08:30.600 of view. One is saying what I think interest rates 0:08:30.960 --> 0:08:33.320 should be. The other thing, not only is what do 0:08:33.440 --> 0:08:35.480 I think introduce rate should be? This should be the 0:08:35.480 --> 0:08:38.959 consequence of my decision. So I think there are two 0:08:38.960 --> 0:08:40.760 different things. So I don't think anyone quarrels with the 0:08:40.760 --> 0:08:42.360 President having a view on interest rates. 0:08:42.720 --> 0:08:46.440 The latter is what the President has done, yes, which 0:08:46.480 --> 0:08:49.840 would imply there is some damage being done. How long 0:08:49.960 --> 0:08:51.640 lasting is that? I mean, there will be a new 0:08:51.679 --> 0:08:54.680 president at some point, and let's assume a new person 0:08:54.720 --> 0:08:56.720 comes in say no, I'm not going to criticize the 0:08:56.720 --> 0:08:59.640 FED anymore. Does it restore the credibility or is there 0:09:00.400 --> 0:09:01.559 lingering damage? 0:09:02.679 --> 0:09:04.360 I mean, I think it depends on how the Federals 0:09:04.360 --> 0:09:06.120 are behaves over the next couple of years. You know, 0:09:06.160 --> 0:09:08.480 if the Federals are basically sticks to his knitting, he 0:09:08.600 --> 0:09:11.199 touch monetary policy independent way, keeps the economy on a 0:09:11.240 --> 0:09:16.240 smooth dijectory lasting damage. The President Trump's were swarted in 0:09:16.280 --> 0:09:17.800 his attempts to take over the FED. 0:09:18.200 --> 0:09:19.800 But if President. 0:09:19.480 --> 0:09:21.920 Trump is somehow successful in taking over the FED and 0:09:21.960 --> 0:09:25.320 getting a very accommodative monetary policy of the consequence that's 0:09:25.360 --> 0:09:28.320 not appropriate for the economic outlook, then of course there'll 0:09:28.360 --> 0:09:31.200 be more lasting damage to the FED. 0:09:31.480 --> 0:09:34.199 Take us inside the room when the f OBC meets, 0:09:34.600 --> 0:09:38.200 because historically it's sort of been like secret, we don't 0:09:38.240 --> 0:09:38.760 know what's going on. 0:09:38.920 --> 0:09:41.640 Well, you have the transcripts, and I think the transcripts 0:09:41.640 --> 0:09:44.240 tram trips are pretty accurate about what the meetings are like. 0:09:44.640 --> 0:09:47.080 You know, basically what happens at a meeting is typically 0:09:47.080 --> 0:09:50.600 you have a briefing from from the from the system 0:09:50.640 --> 0:09:53.520 open the manager about what's going on in markets. Then 0:09:53.520 --> 0:09:56.800 you have a briefing from on the economy from the staff, 0:09:56.840 --> 0:09:59.560 and then briefing on international staff, and then you have 0:09:59.559 --> 0:10:02.120 a go around and everyone talks about their views on 0:10:02.160 --> 0:10:06.319 the economic outlook. It's a pretty collegial place. I mean, 0:10:06.440 --> 0:10:09.359 you know, if you you know, people want to understand 0:10:09.360 --> 0:10:13.440 the views of others. People aren't yelling and screaming and arguing, 0:10:13.480 --> 0:10:17.440 you know, vociferously. It's it's very respectful and you know, 0:10:17.480 --> 0:10:19.560 people spend you know, quite a bit of time, you know, 0:10:19.559 --> 0:10:21.280 when the meeting is not in place actually you know, 0:10:21.440 --> 0:10:23.480 you know, talking in the hall, the coffee, you know, 0:10:23.520 --> 0:10:26.240 having a cup of coffee on the break or at 0:10:26.280 --> 0:10:29.480 the breakfast or lunch. So I would say, you know, 0:10:29.600 --> 0:10:32.320 I find it to be quite collegial, you know, and 0:10:32.360 --> 0:10:36.680 I think that's and I think that makes the institution 0:10:36.800 --> 0:10:37.480 function better. 0:10:38.280 --> 0:10:41.719 A collegiate place where one in Lisa Cook and now 0:10:41.800 --> 0:10:45.760 two in the chair J Powell are under very public attack, 0:10:45.840 --> 0:10:47.160 a personal attack, and I think. 0:10:47.040 --> 0:10:50.840 People are feeling there, you know, that could be me. 0:10:51.640 --> 0:10:53.080 So I think, you know, there's quite a bit of 0:10:53.120 --> 0:10:56.840 sympathy for what those two people are going through. So 0:10:56.960 --> 0:11:01.359 I think, yeah, I think the federal reserves of leadership, 0:11:01.480 --> 0:11:04.160 you know, including you know, all the FO ANDC participants 0:11:04.240 --> 0:11:07.160 are pretty you are very sympathetic to where Paul's coming from. 0:11:07.240 --> 0:11:10.240 And I think they feel really good about what he 0:11:10.440 --> 0:11:13.080 did and said it had to say in his video 0:11:13.120 --> 0:11:14.240 message this past weekend. 0:11:16.080 --> 0:11:19.200 Up next competition in the Gulf between Saudi Arabia and 0:11:19.280 --> 0:11:35.120 the UAE. This is a story about transforming a brand. 0:11:35.720 --> 0:11:38.560 The Kingdom of Saudi Arabia has long been associated with 0:11:38.600 --> 0:11:41.679 the Muslim holy cities of Mecca and Medina, and perhaps 0:11:41.720 --> 0:11:44.880 even more so with oil, but the country's rulers have 0:11:44.920 --> 0:11:48.360 been trying to diversify. What if it could become a 0:11:48.400 --> 0:11:53.120 favorite vacation spot as well. Our colleague Jamana Bressecci brings 0:11:53.200 --> 0:11:55.640 us the story. 0:11:56.400 --> 0:11:59.400 Many countries seek to transform their economies, but few do 0:11:59.440 --> 0:12:02.480 it with such a centralized approach and such vast amounts 0:12:02.480 --> 0:12:06.320 of capital. Through its vision twenty thirty, Saudi Arabia wants 0:12:06.320 --> 0:12:08.520 to shed its image as just an oil nation and 0:12:08.559 --> 0:12:12.560 modernize its economy. Its goal that comes from the very top, 0:12:12.720 --> 0:12:15.480 with the crown prints meeting President Trump and foreign business 0:12:15.520 --> 0:12:17.679 leaders in the United States. At the end of twenty 0:12:17.720 --> 0:12:22.400 twenty five, more than forty percent of Saudi Arabia's GDP 0:12:22.559 --> 0:12:25.360 comes from oil, but by twenty thirty, the kingdom wants 0:12:25.360 --> 0:12:27.800 that number to be closer to thirty five percent, with 0:12:27.880 --> 0:12:30.920 around two thirds of GDP coming from non oil sources. 0:12:31.480 --> 0:12:34.520 Just this month, the country started opening its property market 0:12:34.559 --> 0:12:37.240 to foreign investors and announced plans to do the same 0:12:37.280 --> 0:12:40.040 with its equity markets. After a year of poor returns, 0:12:40.559 --> 0:12:44.720 in twenty twenty five, Saudi Arabia's benchmark index dropped thirteen percent, 0:12:44.920 --> 0:12:47.440 despite strong stock performance in much of the rest of 0:12:47.480 --> 0:12:50.480 the world. Stephen Cook is a Senior Fellow of Middle 0:12:50.520 --> 0:12:53.559 East and Africa Studies at the Council on Foreign Relations. 0:12:53.920 --> 0:12:56.640 Saudi economy has been a commercial economy, but it hasn't 0:12:56.640 --> 0:12:59.920 really had genuine institutions of a market economy. Independent core, 0:13:00.400 --> 0:13:04.640 which he hasn't even tackled yet, but rational investment laws 0:13:04.640 --> 0:13:08.240 and the things that investors really really need in order 0:13:08.280 --> 0:13:12.439 to operate outside of the hydrocarbon industry, you know. 0:13:12.480 --> 0:13:16.400 With the Virgion twenty thirty, His Royal Highness the Crown 0:13:16.480 --> 0:13:21.680 Brands said, we have to diversify the economy. We don't 0:13:21.760 --> 0:13:25.080 want to continue relying on one source of income, which 0:13:25.120 --> 0:13:28.120 is the oil. In a time where we have a 0:13:28.320 --> 0:13:34.960 vast number of other things like mining natural resources, forest, fat, 0:13:35.160 --> 0:13:39.400 gold and nature. We can do a lot in its 0:13:39.559 --> 0:13:43.480 board culture and entertainment and tourism. 0:13:43.520 --> 0:13:47.040 His Excellency ahmedal Fatib has been serving as Saudi Arabia's 0:13:47.080 --> 0:13:49.120 Minister of Tourism since twenty twenty. 0:13:49.800 --> 0:13:54.680 Tourism was one of the main pillars of Virgin twenty thirty, 0:13:54.720 --> 0:13:58.360 and since then we have been working to modernize the country, 0:13:58.960 --> 0:14:04.319 build a new destinys, new airlines, read airlines, new airports 0:14:04.360 --> 0:14:08.640 including King Salman Airport, and the new hotels. 0:14:09.240 --> 0:14:12.200 Leisure tourism might be relatively new to Saudi Arabia, but 0:14:12.240 --> 0:14:15.200 for centuries millions of Muslims have come to Mecca and 0:14:15.280 --> 0:14:17.640 Medina for the Hajh religious pilgrimage. 0:14:17.720 --> 0:14:19.960 We are pleased to have the two holy cities. 0:14:20.320 --> 0:14:24.880 They use to represent sixty percent of our international arrivals 0:14:25.360 --> 0:14:29.800 back in twenty nineteen and last year they dropped to 0:14:30.280 --> 0:14:35.480 forty six percent and the LEDGER increased, And therefore we 0:14:35.600 --> 0:14:41.520 will continue pushing and promoting travel for Ledger to Saudi Arabia. 0:14:42.080 --> 0:14:44.520 Travel to enjoy your holidays in. 0:14:44.480 --> 0:14:48.120 Saudi Arabia, and in the same time the religious tourism 0:14:48.120 --> 0:14:51.240 will grow to a much bigger number than what we 0:14:51.800 --> 0:14:52.640 are having today. 0:14:53.720 --> 0:14:56.880 But now Saudi Arabia wants to put a new foot forward. 0:14:57.320 --> 0:14:59.880 It might look like the Maldives, but that's the Shabbara 0:15:00.120 --> 0:15:02.280 Sorts Saudi Arabia on the Red Sea. 0:15:02.400 --> 0:15:06.680 Well, we were born out of Vision twenty thirty. Vision 0:15:06.720 --> 0:15:08.920 twenty thirty is trying to accomplish a number of different 0:15:08.920 --> 0:15:12.600 things for the country, amongst which obviously creating a vibrant society, 0:15:12.680 --> 0:15:15.520 opening up the kingdom and diversifying the economy. 0:15:16.520 --> 0:15:19.560 John Pegano is CEO of Red Sea Global, a real 0:15:19.680 --> 0:15:22.840 estate development company founded by the Crown Ference himself to 0:15:22.880 --> 0:15:25.080 create the real estate that will become part of Saudi 0:15:25.120 --> 0:15:26.640 Arabia's tourism offerings. 0:15:27.040 --> 0:15:30.400 We have a beautiful, pristine environment which in the world 0:15:30.480 --> 0:15:33.880 today doesn't exist. I mean, we've exploited our nature and 0:15:33.920 --> 0:15:37.160 our environments globally. When I first came to Saudi Arabia, 0:15:37.240 --> 0:15:41.360 I was shocked at how beautiful and pristine this environment was. 0:15:41.400 --> 0:15:44.600 We had beautiful islands, a coastline that was largely untouched. 0:15:45.520 --> 0:15:48.680 Pegano's shock is exactly the image that the kingdom wants 0:15:48.680 --> 0:15:51.680 to change. Stephen Cook said, there's a long road ahead. 0:15:52.480 --> 0:15:55.120 I was there before the opening up of Saudi Arabia. 0:15:55.120 --> 0:15:57.120 It was extraordinary because nobody had been there. But in 0:15:57.240 --> 0:16:01.080 terms of tourism, I think that yes, there'll be tourism 0:16:01.120 --> 0:16:05.760 from you know, major Muslim countries, Indonesia, Malaysia, India which 0:16:05.880 --> 0:16:08.360 has the second largest Muslim population in the world, even 0:16:08.400 --> 0:16:11.040 though it's not a Muslim country. But also I think 0:16:11.080 --> 0:16:13.400 there is a genuine interest in attracting people from the 0:16:13.400 --> 0:16:16.760 West Americans and Europeans, and not just the kind of 0:16:17.440 --> 0:16:20.360 you know, adventure tourism that they may have seen so far. 0:16:21.000 --> 0:16:23.880 Beach res words attract wealthy tourists, but the kingdom is 0:16:23.920 --> 0:16:27.240 also leaning into its rich history to combine luxury and 0:16:27.280 --> 0:16:30.160 culture for what it hopes will be a unique experience. 0:16:30.560 --> 0:16:33.880 Iloid that is an incredible place, a place like no other. 0:16:34.320 --> 0:16:38.360 It's a region in northwest Saudi Arabia with incredible natural 0:16:38.400 --> 0:16:43.600 and cultural significance. It's located on the ancient and since 0:16:43.720 --> 0:16:49.000 route and many civilization has passed through four thousands of years. 0:16:49.280 --> 0:16:52.720 Abiri Lakil is the CEO of the Royal Commission for Alahala, 0:16:52.840 --> 0:16:55.760 which means glory in Arabic. The city is one of 0:16:55.840 --> 0:16:59.440 eight UNESCO World Heritage Sites in Saudi Arabia and the 0:16:59.520 --> 0:17:02.760 kingdom has big plans to make the destination a central 0:17:02.800 --> 0:17:04.520 part of its tourism initiative. 0:17:05.160 --> 0:17:10.080 Aloola is not just a historical site. Illola is a home. 0:17:10.520 --> 0:17:14.400 Many families has left there for generations, and I would 0:17:14.440 --> 0:17:18.560 say that an example would be Aliveela old town where 0:17:18.600 --> 0:17:22.880 it was inhibited by the families starting from the twelfth 0:17:22.880 --> 0:17:28.880 century until late ninety eighties. Now, if you bring all 0:17:28.880 --> 0:17:35.080 of this together, the ancient past, the incredible nature, protected nature, 0:17:35.160 --> 0:17:39.040 and the living culture and you know, living community, this 0:17:39.359 --> 0:17:43.800 basically gets you a complete picture of Ilola. It's important 0:17:43.840 --> 0:17:46.960 to say that Aliola is Saudi Abas treasure, but it's 0:17:47.000 --> 0:17:48.200 also the gift for the world. 0:17:48.840 --> 0:17:53.359 Which year did Alerala open for international tourists. 0:17:53.440 --> 0:17:57.879 We started our efforts back in twenty nineteen. Today we 0:17:57.960 --> 0:18:01.879 have received around three hundred thousd and guests visitors to 0:18:01.880 --> 0:18:05.400 eleven thirty percent of which our international visitation. So we're 0:18:05.440 --> 0:18:08.960 try getting around two million visitors by twenty thirty five. 0:18:09.480 --> 0:18:12.119 If Lalas planned to bring in two million visitors by 0:18:12.160 --> 0:18:15.560 twenty thirty five, sounds ambitious when it attracted only fifteen 0:18:15.600 --> 0:18:18.439 percent of that last year. That's because it is. It 0:18:18.520 --> 0:18:22.200 echoes the kingdom's big target of getting fifty million foreign 0:18:22.320 --> 0:18:24.679 visitors a year by the end of the decade, in 0:18:24.720 --> 0:18:28.000 addition to one hundred million local tourists. It's a goal 0:18:28.040 --> 0:18:31.080 that is even more stunning considering the kingdom only opened 0:18:31.119 --> 0:18:34.320 its borders to leisure tours in twenty nineteen. Do you 0:18:34.359 --> 0:18:36.160 feel like you're on track to get there? 0:18:36.440 --> 0:18:37.520 I'm very comfortable. 0:18:38.320 --> 0:18:41.040 The fifty million will puts out Arabia among the top 0:18:41.680 --> 0:18:44.280 ten most visited countries around the world. 0:18:44.400 --> 0:18:45.120 And how much of a. 0:18:45.119 --> 0:18:49.360 Draw are those big mega events the World Expo potentially 0:18:49.440 --> 0:18:51.879 FIFA World Cup. How much of a draw is that 0:18:51.960 --> 0:18:54.840 going to be in terms of bringing in those international 0:18:54.840 --> 0:18:57.640 tours and where does it fit in to your broader plan. 0:18:57.880 --> 0:19:01.520 It is very important for us to the rebeat the 0:19:01.600 --> 0:19:05.879 visitors who will come again and again, to spend their 0:19:05.880 --> 0:19:09.200 holidays in Saud Arabia, not to come only for business 0:19:09.400 --> 0:19:11.760 or to visit their families and friends. 0:19:11.960 --> 0:19:16.280 Adding leisure tourism to its offerings requires a big capital outlay. 0:19:16.760 --> 0:19:19.879 The government plans to spend almost one trillion dollars in 0:19:20.000 --> 0:19:24.000 all to transform its tourism industry. Private investment in tourism 0:19:24.160 --> 0:19:26.920 rose to three point eight billion dollars in twenty twenty four, 0:19:27.160 --> 0:19:29.960 and about forty percent of that comes from foreign capital. 0:19:30.320 --> 0:19:33.040 How important is it to get private sector involvement with 0:19:33.119 --> 0:19:35.399 all of these events and projects that you're putting together. 0:19:35.560 --> 0:19:38.439 It's very important. It is part of Vision twenty thirty. 0:19:38.720 --> 0:19:42.560 We want the private sector to drive. We are a 0:19:42.640 --> 0:19:48.000 regulator when we open the sector. The government started to 0:19:48.040 --> 0:19:51.960 stimulate the sector, but down the road this sector has 0:19:52.000 --> 0:19:55.520 to be run by the private sector. The private sector 0:19:55.640 --> 0:19:59.520 and the tourism build the hotel, build the shopping mall, 0:19:59.600 --> 0:20:01.359 and build the restaurants, et cetera. 0:20:01.440 --> 0:20:02.600 And they operated. 0:20:03.240 --> 0:20:06.280 They are the investor, they are the operator, but they 0:20:06.480 --> 0:20:10.200 have to The private sectors in Saudi Arabia is contributing 0:20:10.640 --> 0:20:14.800 heavily and building new destinations and the new experiences. 0:20:14.840 --> 0:20:16.280 We cannot do it. 0:20:16.359 --> 0:20:19.800 Alon the private sector rule is very vital to the 0:20:19.880 --> 0:20:21.040 success of this sector. 0:20:21.200 --> 0:20:24.000 The Kingdom of Saudi Arabia also has stiff competition from 0:20:24.040 --> 0:20:27.320 its neighbor, the United Arab Emirates and beach destinations in 0:20:27.359 --> 0:20:28.679 Africa and Asia. 0:20:28.720 --> 0:20:31.920 This is a dynamic throughout the region. There is competition 0:20:31.960 --> 0:20:36.480 among all of these countries in cities actually and even 0:20:36.520 --> 0:20:38.840 within them. You know, there's a competition between Abu Abi 0:20:38.840 --> 0:20:42.959 and Dubai, even though they're both in the UAE. And 0:20:43.040 --> 0:20:45.520 I think that that the Saudi has always looked themselves 0:20:45.560 --> 0:20:48.240 as the big dog in the region, but they lagged 0:20:48.320 --> 0:20:52.520 behind in terms of the kind of ability to attract 0:20:52.560 --> 0:20:57.720 businesses and firms and bilbies gleaming gleaming cities. 0:20:58.080 --> 0:21:01.360 International visitors account for almost eighty percent of the UAEES 0:21:01.440 --> 0:21:05.160 tourism expenditure, and right now Dubai offers tour is something 0:21:05.200 --> 0:21:08.560 that much of the rest of Saudi Arabia doesn't alcohol, 0:21:08.720 --> 0:21:10.400 but even that is changing. 0:21:11.240 --> 0:21:13.520 Well, you can get alcohol in the diplomatic core. You 0:21:13.520 --> 0:21:15.640 could always get it through diplomatic pouch, but now there's 0:21:15.680 --> 0:21:22.080 actually a shop. And so Saudi's proclaim, not officially, but 0:21:22.119 --> 0:21:25.480 they would say, you know, this is a precursor. This 0:21:25.680 --> 0:21:28.639 is the first step towards legalizing alcohol in the kingdom. 0:21:28.720 --> 0:21:31.280 I don't think anybody knows when that's going to happen, 0:21:31.359 --> 0:21:33.920 and from I think the Saudi perspective, that's not make 0:21:34.040 --> 0:21:36.400