Money, money everywhere

22 December 2005 By Edward Hadas Follow @edwardhadas

The oilrich kingdom is starting to spend its winnings. One day it s a $27bn economic city; the next a $17bn fighter jet contract. As this gathers pace it will hurt the greenback. It involves recycling money from the global capital markets mainly into European imports.

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King Abdullah of Saudi Arabia officially launched the King Abdullah Economic City on Wednesday. The totally new city, to be built on the Red Sea, will cost $27bn. Emaar Properties, a development company based in the United Arab Emirates, will be the lead contractor, while the Saudi Arabian General Investment Authority will be the prime facilitator. Some 30% of the equity in this project is expected to be sold in due course.

Saudi Arabia has signed a memorandum of understanding to purchase Eurofighter military jets, according to John Reid, the UK defence secretary. The total value of the contract is estimated to be $17bn.

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