US-Saudi Arabia business relationship moves beyond ‘guns for oil’

Saudi Arabia’s King Abdul Aziz meets with American President Franklin D. Roosevelt on Feb. 14, 1945. (SPA)
Updated 20 March 2018
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US-Saudi Arabia business relationship moves beyond ‘guns for oil’

DUBAI: Nothing fundamental has changed since the very first meeting between a king of Saudi Arabia, Abdul Aziz bin Saud, and an American president, Franklin D. Roosevelt, in the spring of 1945 on board the USS Quincy in the Suez Canal in Egypt.
Then, according to historians of the meeting, the key themes were: Security and oil. The two men found common interests in their desire to fix regional borders in the wake of World War II (though they differed significantly over the issue of Palestine) and both wanted to guarantee markets for crude oil.
But the business of America is business, and the political relationship that was struck that day cemented an already existing commercial relationship in the oil fields. Since then, US-Saudi business relations have gone from strength to strength, even in such difficult times as the oil “spikes” of the 1970s and the aftermath of the 9/11 attacks on the US.
Daniel Yergin, the Pulitzer-winning author of the “The Prize,” told Arab News: “This is a partnership that goes way back. It is striking that the crown prince will be coming to the United States on the 80th anniversary of the discovery of oil in Saudi Arabia by American geologists.”
The relationship has broadened significantly from the simple “guns for oil” formula of the past. Now, US companies play a major role in the overall economic development of the Kingdom, from infrastructure and industry, through finance and investment, to health and entertainment.
Even in the early days, US companies saw the opportunities that came with the opening up of the Kingdom, with big corporations such as engineering group Bechtel following the oil companies’ lead to build roads and other essential infrastructure.
Ellen Wald, American Saudi expert and author, describes in her forthcoming book “Saudi, Inc.” how Bechtel moved from laying oil pipelines to building royal palaces, highways, schools, power plans, hospitals and hotels. “It saw the Saudi public works campaign as a sure source of profit,” she wrote.
Many US businessmen have spoken about the big transformation going on in the Kingdom under the Vision 2030 strategy in much the same way — as a gigantic and potentially very profitable program of public works.
An overview of mutual business reveals the scale and the depth of US-Saudi business links, and also underlines the fact that it is a two-way street.
Figures from the Washington DC-based US-Saudi Arabian Business Council (USSABC) showed total bilateral trade at $35.2 billion, with the Kingdom holding a slight balance advantage from its $18.9 billion of exports. Saudi Arabia is in the top 20 US trade partners, while America is the second biggest partner for merchandise into the Kingdom.
Saudi Arabia is the second biggest source of imported oil into the US and the third biggest source of international students in the US educational system.
Saudi Arabia — private sector and government — is estimated to have more than $1 trillion invested in the US, including a big holding of US Treasury bills.
There are some eye-watering investments within those overall figures. Saudi Aramco’s Motiva Enterprises is the largest oil refinery in the US, based in the oil state of Texas, which will also be home to a $3.9 billion petrochemicals plant joint-venture led by Exxon Mobil and Saudi Basic Industries Corporation (SABIC).
The pace of investment has increased in recent years. The Saudi sovereign investor Public Investment Fund (PIF) has put $3.5 billion into high-tech mobility company Uber, while PIF has teamed up with Blackstone in a $40 billion program of infrastructure investment.
The flow is far from one-way. Chemicals giant Dow is the largest foreign investor in the Kingdom, thanks to its $20 billion joint venture with Aramco in the Sadara petrochemicals plant. GE, the engineering conglomerate, has pledged billions of investment in power and energy in Saudi Arabia as part of its long-running business partnership. Exxon Mobil continues to be a major investor in Saudi energy.
And, of course, there is the defense industry. Saudi Arabia is America’s biggest customer for military sales, with all the big US defense manufacturers working as suppliers at all levels of the security business.
At the Riyadh summit last year, President Trump was able to announce $110 billion of defense deals with Saudi Arabia, including deals with Lockheed Martin, Boeing and Raytheon. Analysts expect those transactions to be taken to the next level during the royal visit to the US.
The USSABC estimates that the total amount of foreign direct investment (FDI) from the US to Saudi Arabia amounts to $9.83 billion — the highest of any foreign country into the Kingdom — while $12.3 billion went in the opposite direction, supporting 10,600 American jobs in affiliates of Saudi-owned firms.
There was much speculation after last year’s anti-corruption drive in the Kingdom that foreign firms might hold back on FDI, but so far there have been no reports of US firms canceling any FDI projects. The USSABC declined to comment on the effects of the anti-corruption campaign.


How Saudi women are getting ahead of men as STEM graduates

Dr. Fatima Alakeel, cybersecurity expert. (AN photo)
Updated 20 March 2019
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How Saudi women are getting ahead of men as STEM graduates

  • ‘Securing a job after the degree remains the challenge,’ says Dr. Fatema Alakeel of King Saud University in Riyadh
  • ‘Saudi women are ambitious,’ says one graduate. ‘We are acquiring high degrees and seeking successful careers’

DUBAI: More and more girls in Saudi Arabia are opting for an education in science, technology, engineering and maths (STEM), and now the challenge is finding them employment, said Dr. Fatima Alakeel, a cybersecurity expert and faculty member at King Saud University (KSU) in Riyadh.
“In the Kingdom, STEM-related jobs are limited at the moment, as the economy is primarily oil-based and there are few technical jobs available,” said Alakeel, who is also the founder and CEO of the non-profit Confidentiality, Integrity & Availability Group (CIAG), which focuses on information security training and research in Riyadh.
According to a government report on the labor market situation in the third quarter of 2018, more than 30 percent of Saudi women aged between 15 and 65 are unemployed.
Among them, the highest rate of unemployment is among 20-24-year-olds (more than 70 percent) and among 25-29-year-olds (55 percent).
According to the report, there are 923,504 Saudi jobseekers, of whom 765,378 are women (82.2 percent).
“We have more girls in STEM education compared to Western countries,” said Alakeel, who completed her doctoral degree in computer science in the UK at the University of Southampton in 2017.
According to a report prepared by the Saudi Education Ministry, girls accounted for 57 percent of undergraduates for the year 2015-2016 in the Kingdom.
That same year, women outnumbered men in graduating with a bachelor’s in biology, information technology (IT), mathematics and statistics, and physics.
According to a survey Alakeel recently conducted on social media, “almost 80 percent of (Saudi) girls were keen to study STEM, but securing a job after the degree remains the challenge,” she said.
Maha Al-Taleb, 22, graduated earlier this year with a degree in technology from KSU, specializing in IT networks and security.
“It’s common for girls in the Kingdom to opt for STEM education,” said Al-Taleb, who now works in a public sector company in Riyadh as a junior information security analyst.
“Saudi women are ambitious. We’re acquiring high degrees and seeking successful careers. I don’t know why the world assumes that Saudi women are a backward tribal species who have no say in these matters. This entire perception is flawed.”
Al-Taleb got a job offer immediately after university, but realizes that not all her peers are as fortunate. Women “are facing problems in securing jobs, not because companies don’t want to hire us, but because employment for Saudi youths is a major challenge,” she said.
“In today’s Saudi Arabia, parents are encouraging their daughters to get a degree not just in the Kingdom; they also want them to go to Western universities. It has become a common phenomenon. Things have changed. Women are a crucial part of the nation’s development process.”
Not all women graduating in the Kingdom are as lucky, among them Razan Al-Qahtani. “It has been several months since I graduated, yet I haven’t been able to find a job. It has been a struggle so far,” said the 25-year-old IT graduate. “We have more talented and qualified girls, especially in the field of technology, but there are few jobs available. It’s a difficult situation, but we’re hopeful things will change very soon.”
Al-Qahtani expressed confidence that the Kingdom’s Vision 2030 reform plan will bring opportunities for qualified Saudis.
As part of Vision 2030, the government has committed to raise employment among Saudi women.
Alakeel said the government is working hard to find a solution, and it is only a matter of time until more such jobs are on offer.
“As per Vision 2030, there will be more jobs, including technical jobs, available in the country. Once we have more jobs, women will eventually get their due share,” she added. According to Alakeel, female empowerment and promotion to leading roles have made huge progress in Saudi Arabia, and this may affect existing STEM job opportunities.
“We’re glad to see Her Royal Highness Princess Reema bint Bandar Al-Saud becoming the first female ambassador of the country. It only suggests change is on the way,” Alakeel said.
Al-Taleb expressed pride in the way her parents have supported her, saying: “My father isn’t educated and my mother has basic literacy, but both provided me with the education I desired. They want their daughters to be as successful as their sons.”
Like women in any country, the transition from university to the workplace is not always easy, even for young Saudi women with technology degrees. Yet they are not losing hope.
“We realize these are difficult times in terms of employment, especially in technology-related fields, but things will change,” Al-Taleb said. “Saudi women will soon be ruling the fields of STEM all over the country.”