RIYADH, 20 March 2005 — With Saudi-US bilateral trade on the downswing, the Kingdom is spearheading a major drive to promote trade with US and investment in the Kingdom, where projects estimated at around $623 billion in the water, power generation, communication, mining, oil and gas, banking, railroad and other sectors are waiting to be tapped.
This was disclosed to Arab News by Omar Bahlaiwa, secretary-general of the Saudi Committee for the Development of International Trade (CIT), who said a 50-member multi-sectoral trade mission will leave for the US in May to visit five major cities - New York, Atlanta, Chicago, Houston and San Francisco.
He said the objective of the trade mission is to scout for trade and investment opportunities between the two countries, especially when the Saudi economy remains strong with the liberalization program in full swing. “Even though the volume of trade remains as it is, the rate of growth remains sluggish.”
He said it is in the US’ own interest to take advantage of the trade and investment opportunities in the Kingdom. “If they miss these opportunities, somebody else will seize them.”
US firms were notably absent when European, Russian and Chinese companies won gas exploration rights last year in Saudi Arabia.
Minister of Petroleum and Mineral Resources Ali Al-Naimi has also looked increasingly East for joint ventures in refining and petrochemicals.
Bahlaiwa said that besides trade and investment, they are also looking for joint ventures in the financial sector. With high liquidity in the market, two foreign banks - Gulf International Bank and the Emirates Bank - have already established their presence in the Kingdom, while three other Western banks are poised to enter the market. The Saudi business mission will also explore the possibility of tapping American banks in this regard.
“Our major partner is still the United States and I think it will continue for some time,” Bahlaiwa said. “However at the same time we are looking at Europe, the Far East-countries like China, Japan, Korea-as other strategic partners.”
“The growth rate of the Saudi economy is very high...but that growth did not reflect positively on imports from the United States,” he said.
According to a study conducted by the Al-Rajhi Banking and Investment Corporation (ARABIC), the estimated real GDP growth rate in the Kingdom remained strong at 5.3 percent last year, while inflation remained at the lowest in the GCC at 0.6 percent.
On the investment side, it is expected that the Kingdom would need as much as $ 117 billion in the power sector alone, while the training sector would require cash injection of $ 2.4 billion, with its rate of growth standing at 6 percent annually.