BE2C2 Report — Saudi Arabia and the US have announced plans to strength cooperation in a number of sectors with a new joint investment program potentially worth more than $200bn over the next four years.
The plans were announced on Wednesday during US visit by Saudi Deputy Crown Prince Mohammed bin Salman and a day after he met with US President Donald Trump for private lunch — a meeting being hailed as a “historical turning point” in Saudi relations with Washington, according to the Financial Times.
The influential paper said Trump has backed a plan to boost Saudi Arabian investment in the US, with the White House on Wednesday saying it could potentially provide more than $200bn for infrastructure and other sectors.
A new wave of Saudi investment in the US would mark a significant turn in relations between the two countries.
In a press statement, the White House said the sum, which includes direct and indirect investments, would involve unique initiatives in energy, industry, infrastructure, and technology.
It added that President Trump also supported US investments in Saudi Arabia and the facilitation of bilateral trade.
The plans could create as many as one million direct American jobs during the period and jobs in Saudi Arabia, according to the statement.
“The Deputy Crown Prince reviewed Saudi Arabia’s Vision 2030 program for the President and agreed to put in place specific bilateral programs to help both countries benefit from new opportunities created by the kingdom’s implementation of those new economic plans,” it said.
A Saudi adviser told FT “huge Saudi investments” into the US were an important part of the discussions between Mr Trump and Prince Mohammed. The kingdom, which is enduring an economic downturn triggered by low oil prices, is also keen to attract increased US investment.
The newspaper report said Saudi officials have been considering plans to invest more than $100bn in the US, with a focus on infrastructure projects, according to people briefed on the matter. The investments would aim to generate long-term returns for Saudi Arabia, with Riyadh considering channeling the funding through US-based private equity firms, the people said.
“Saudi Arabia has a substantial investment program set aside for America — it’s important to appreciate its large contribution to the US economy, and the creation of jobs,” said Ali Shihabi, executive director of the Arabia Foundation, a Saudi think-tank in Washington DC.
A senior Saudi adviser said the meeting between Mr Trump and Prince Mohammed had “put things on the right track, and marked a significant shift in relations, across all political, military, security and economic fields”.
The Saudi-US investment announcement came as deals worth $65bn were signed between Saudi Arabia and US rival China during the visit of King Salman.
14 agreements pertaining to investments, energy and space were signed when Chinese President Xi Jinping met with Saudi Arabia’s King Salman, according to Xinhua news agency.
The meeting between the king and Xi comes at a time when China has reportedly been asked to play a bigger role in the Middle East, according to the South China Morning Post.
Chinese diplomats who spoke to the Hong Kong-based newspaper said China is growing confident about its influential role in a multipolar world, UPI reported.
Energy cooperation, which has been the foundation of China-Saudi Arabia relations, is at the center of Saudi Arabia’s concerns, according to the report.
Saudi Arabia is the top exporter of crude oil while China is the world’s biggest importer.
The United States has decreased imports of Saudi oil in the wake of a shale gas boom.
Trade between China and Saudi Arabia has grown exponentially, and the two sides are expected to expand political and military cooperation, according to the report.
The Saudi ruler is on a month long Asia tour to promote investment in the kingdom and boost oil sales – with his last stop in the Maldives.
Crown Prince Mohammed bin Salman, who is on a two-week visit to the US while his father tours Asia, has taken a leading role in the kingdom’s foreign affairs, as well as coordinating highly ambitious efforts to reform the oil-dependent economy according to the National Transformation Plan which envisages localization by 2020.
(Based on reporting in UPI, Financial Times, South China Post, Xinhua)