The Saudi royal family has ramped up efforts to broaden economic ties with key commercial partners in a bid to shift away from the kingdom’s long-standing dependency on oil. The diplomatic effort aims to attract global investment to Saudi Arabia, while also creating investment opportunities of its own.
On March 16, King Salman met with Chinese President Xi Jinping to discuss the prospect of deepening the nations’ strategic partnership across energy, trade, aviation, finance, culture, education and security. The talks resulted in a multitude of agreements, including a proposal for 35 projects worth a total of $65bn, according to a report by Xinhua.
The dwindling price of oil has lead to a constriction of the Saudi economy, making the diversification of investment increasingly urgent
Interestingly, Prince Mohammed met with President Trump just two days earlier, establishing an agreement to develop a four-year joint plan for economic cooperation. The plan involved potential investments worth over $200bn and encompassed energy, industry, infrastructure and technology.
The investment push is an important part of the Saudi plan to diversify its economy through non-oil investments, but also plays to Trump’s job creation mantra. According to the White House, the investments could create a million new jobs in the US, The Wall Street Journal reported.
King Salman also met with Japanese Prime Minister Shinzo Abe, with talks culminating in the announcement of the Saudi-Japan Vision 2030. As part of the vision, economic zones will be created in Saudi Arabia in order to lure investment from Japanese companies.
The tour comes at a pivotal time, as the Saudi leadership decides where to list the shares of state-owned oil giant Aramco for its upcoming IPO – touted as the largest in history. The IPO is expected to go ahead in 2018 and would mark the first major push towards the diversification of the Saudi economy.
The dwindling price of oil has lead to a constriction of the Saudi economy in recent years, making the move increasingly urgent. During his recent trip to China, King Salman said: “We take care of our interests, as well as the interests of those working with us.”