Saudi Arabia and the US sign 13 investment agreements during President Joe Biden’s visit

Saudi Arabia and the United States signed 13 investment deals on the sidelines of US President Joe Biden’s visit to the kingdom on Friday, as the Arab world’s largest economy seeks to attract more foreign direct investment to diversify.

The agreements cover sectors including energy, aerospace, defense, textiles, manufacturing, education and tourism, according to a statement from Saudi Arabia’s Ministry of Investment on Saturday.

“The agreements are based on long-standing economic relations and illustrate the sustained confidence of American investors in the opportunities in the kingdom,” the ministry said.

In October last year, Saudi Crown Prince Mohammed bin Salman launched the National Investment Strategy, which aims to generate 388 billion riyals ($103.47 billion) in foreign direct investment annually, according to the state-run Saudi News Agency.

The kingdom also expects to increase domestic investment to around 1.7 trillion riyals by 2030 under the new strategy.

Saudi Arabia, OPEC’s largest oil exporter, is focusing on economic diversification under its Vision 2030 program, which aims to reduce its dependence on hydrocarbons and develop local industries and manufacturing capacity.

The National Investment Strategy, which is one of the main pillars of Vision 2030, is expected to contribute to the growth of the local economy.

Under the strategy, Saudi Arabia aims to increase the private sector’s contribution to its gross domestic product to 65 percent and increase the share of FDI to 5.7 percent of its GDP.

The strategy also aims to increase the share of non-oil exports from 16% to 50%, reduce the unemployment rate to 7% and elevate the kingdom to one of the top 10 positions in the Global Competitiveness Index by 2030.

US investment in Saudi Arabia has continued to grow in recent years, with 743 companies present in the kingdom and nearly 70,000 Saudis employed by US companies, the Investment Ministry said.

The US and Saudi Arabia signed four memoranda of understanding on health, according to the statement.

Other agreements include a partnership between the Ministry of Investment and aerospace company Boeing in areas related to aircraft manufacturing, and an agreement between investment holding company Ajlan & Bros and US smart energy firm SolarEdge to explore investments in renewable energy.

The US has reached an agreement with the Royal Commission on Jubail and Yanbu, while private sector companies such as Raytheon Defense Industries, Medtronic, Digital Diagnostics and IQVIA have also signed investment agreements with firms in Saudi Arabia, according to state news agency SPA.

US President Joe Biden visits the Middle East – in pictures

American companies in the energy, tourism, education, manufacturing and textile sectors have also teamed up with Saudi-based firms to boost investment, SPA said.

Saudi Arabia’s Ministry of Communications and Information Technology (MCIT) has signed a memorandum of cooperation with technology company IBM to train 100,000 young women and men over five years to position the kingdom as a center for technology and innovation in the Middle East and North Africa region.

MCIT has also signed a memorandum of cooperation with the US National Communications and Information Administration, which includes 5G and 6G technologies.

The agreement aims to accelerate the growth of the digital economy and the pace of research, development and innovation in the kingdom’s digital industries, according to the news agency.

The International Monetary Fund estimates that Saudi Arabia’s economy will grow 7.4 percent this year, driven by higher oil revenues, a projected improvement in the country’s non-oil gross domestic product and its efforts to diversify the economy.

The World Bank estimates that the country’s economy will grow by 7% this year, while Jadwa Investment expects the economy to grow by 7.7% in 2022.

Updated: July 16, 2022, 8:44 am

Leave a Comment

Your email address will not be published.