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Kuwait to set up $132bn 'Silk City'

London, July 22, 2008

Fuelled by soaring oil prices, Kuwait has ambitious plans to invest $132 billion building a model city in its northern desert, complete with rail links to the rest of the Middle East, central Asia and China.

The high-concept project may seem outlandish on one  level, but Kuwait’s leadership is committed to the plan, according to one of the project’s originators, who argues that it could bring unprecedented political and economic gains to the region, including establishing better business ties with Israel.

’We are not dreamers at all when we talk about investing $132 billion,’ said Sami Alfaraj, president of the Kuwait Center for Strategic Studies and an adviser to the GCC.

’We’re thinking on a different plane because we cannot afford to think like everyone else. We’re thinking about something that might seem unimaginable,’ he told Reuters in London, where he is holding meetings on the project.

’We’re going to outmanoeuvre everybody who is going to remain in the old mode of thinking about economic prospects.’  London-based architects Eric R. Kuhne & Associates have drawn up designs for the project, to be called Madinat Al-Hareer or Silk City, which would include a 1,000-metre high skyscraper.

The city, set for completion in 2023, would be home to around 700,000 people and linked to the capital, Kuwait City, by a dedicated mega-causeway. But more importantly, it would also be linked to the rest of the Middle East, Europe and far-flung corners of the world by rail, principally as a trade route.

’It is the official policy of the state of Kuwait to build this city and to link it to Damascus, to Baghdad, to Iran and all the way beyond. This is where we want to put our money. We want to build railways all the way to China,’ said Alfaraj, who also advises the government on security issues.

’We hold the keys to a lot of things, but it’s not just money. For small states like us, the important thing is not oil, it’s not money, it’s influence. If we do not use oil or money to increase our influence in a peaceful way, we have no existence.’

Israeli ties

While Silk City and its rail links - dubbed a modern-day Silk Road - may seem dreamy to the point of unimaginable, Alfaraj says talks have been taking place with Iran since 1998 and with other countries on an intermittent basis for years.

At a time when Kuwait, with the world’s fifth-largest proven oil reserves and among the top oil exporters, is sitting on massive petroleum profits, the funding is already in place.

But aside from that, it is the regional economic and social gains, including potentially closer, deeper ties with Israel and the Palestinians, that Alfaraj emphasises.

Most Muslim states won’t do business with Israel, but Alfaraj says such thinking is now outdated, particularly as Israel forges ahead as a global technology leader.

’People in the Gulf are smart enough to understand the impact of technology on their development and they know that the technology is in Israel,’ he said.

Russia and China have signed common trade zone agreements with the GCC - which groups Kuwait, Saudia Arabia, Oman, the United Arab Emirates, Bahrain and Qatar - and such closer ties with Israel, among others, are not out of the question.

’If you look at the taboos of yesterday, they don’t exist,’ he said. But Gulf Arab countries are unlikely to lift a boycott of Israel unless a comprehensive peace deal is reached between Israel and the Palestinians.’-Reuters




Tags: Kuwait | Israel | Silk City | Plans | trade ties |

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