RIYADH, 10 April 2006 — Saudi and Spanish firms will set up a $5 billion joint investment fund, it was announced here yesterday following the signing of a bilateral agreement during the visit of King Juan Carlos. Custodian of the Two Holy Mosques King Abdullah and Carlos oversaw the signing of the pact to promote and protect investments.
Abdullah held wide-ranging talks with Carlos Saturday night. Carlos, who is on a three-day official visit to the Kingdom, also visited the Shoura Council yesterday and held talks with Shoura Chairman Saleh Bin-Humaid and other Shoura members on ways to enhance Saudi-Spanish relations in various spheres.
The Spanish king arrived here on Saturday with Queen Sofia.
Spanish Industry, Trade and Tourism Minister Jose Montilla and Amr Dabbagh, governor of the Saudi Arabian General Investment Authority (SAGIA), signed the landmark agreement at a function in Riyadh yesterday.
Foreign Minister Prince Saud Al-Faisal told reporters after a meeting with his Spanish counterpart Miguel Angel Moratinos that Spanish and Saudi firms would set up a $5 billion investment fund.
Private sector “companies will allocate this sum for joint investments ... It is an expression of the confidence gained by these companies as a result of growing relations between the two countries,” Prince Saud said.
The talks between King Carlos and Saudi officials focused on a range of bilateral and regional issues with special reference to the Middle East peace process, said a Spanish Embassy spokesman. During his visit to the Shoura Council, Bin-Humaid briefed Carlos about the powers and functions of the Shoura Council.
Speaking on the occasion, Carlos said that the Kingdom and Spain have great potential to cooperate in different fields.
Referring to the situation in the Middle East, the Spanish king said Madrid would urge the EU to play “a more active role” in resolving the Israeli-Palestinian conflict.
“The EU should bear more responsibilities, and of course the Spanish government will seek and support any kind of proposal or action to ensure a comprehensive peace in the Middle East region,” said Carlos, while referring to the growing Saudi-Spanish relationship.
The visit of the Spanish king will boost relations in all spheres, said Spanish diplomats, adding that their country was seeking substantial expansion of bilateral relations with Saudi Arabia, especially in the fields of defense, energy, water management and tourism.
Speaking to newsmen later, Bin-Humaid said the Shoura officials in their meeting with the Spanish king reviewed the whole gamut of bilateral issues.
He said the Shoura, the appointed council whose function is to advise the king and his ministers, holds membership in different regional and international parliamentary institutions.
Prince Saud signed Saturday a memorandum of understanding with Moratinos, in the presence of the two kings. The agreement will help facilitate bilateral talks between the officials of the respective ministries of foreign affairs.
This will help the two governments in formulating their bilateral policies. An agreement was also signed on promotion and protection of investments in the two countries.
Manuel Cacho, spokesman of the Spanish foreign minister, said Prince Saud would visit his country on May 16-17 to sign two more agreements; one on the avoidance of double taxation and the other related to the legal framework for economic cooperation.
Carlos also held talks with a number of other top-ranking Saudi officials, including Interior Minister Prince Naif, Riyadh Governor Prince Salman and Minister of Petroleum and Mineral Resources Ali Al-Naimi.
The balance of trade between Saudi Arabia and Spain is currently heavily tilted in favor of Riyadh, and the visit of the Spanish royal couple is aimed to raise economic links to a level matching political relations, a Spanish official said.
Montilla said trade between the two countries exceeds $3.5 billion a year, with Spanish exports to Saudi Arabia reaching some $770 million. Spain is the world’s fourth-largest investor by outflows of Foreign Direct Investment toward other countries and “the largest or second-largest overall foreign investor in each and every country in Latin America,” he said.
After expanding in Europe, “Spanish companies are now looking in the direction of Saudi Arabia,” Montilla said.
The provisions of the investment agreement “guarantees investors the right to transfer their returns freely,” he said.
