A common ambition to strengthen Saudi-French strategic partnership

A common ambition to strengthen Saudi-French strategic partnership
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Finance Minister Ibrahim Al-Assaf holds meeting with his French counterpart Michel Saban in Paris.
A common ambition to strengthen Saudi-French strategic partnership
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SOLID BONDS: Deputy Crown Prince Mohammed bin Salman with French Prime Minister Manuel Valls during his visit to Paris last month.
A common ambition to strengthen Saudi-French strategic partnership
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A common ambition to strengthen Saudi-French strategic partnership
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INVESTMENT TALKS: Deputy Crown Prince Mohammed bin Salman and French President François Hollande with their respective delegations hold formal talks at Elysee Palace in Paris last month.
Updated 13 July 2016

A common ambition to strengthen Saudi-French strategic partnership

A common ambition to strengthen Saudi-French strategic partnership

The “Saudi–French joint committee” reflects the common ambition to strengthen the Franco-Saudi strategic partnership and deepen our special relationship through the improvement of France’s trade and investment relationship and the identification of a new cooperation prospects within the framework of the National Transformation Program 2020 adopted by the Kingdom to implement the Saudi Vision 2030.

More than 600 people took part in the first Saudi-French business forum in Paris.
The second one in October 2015 was organized in Riyadh with the presence of French Prime Minister Manuel Valls.
More than 2000 participants were registered and 130 French firms came to the event: It was the biggest business delegation to visit the Kingdom.
They have shown a real interest in the Saudi market. The third one should take place next fall.
Indeed, France supports the Vision 2030. It is the occasion to show another face of the Saudi-French partnership by providing know-how transfer and capacity building.
For example, France works on energy but also in transportation: In their offer for the Makkah Metro Project, Alstom has included a proposal to build a regional hub in the Kingdom for the transportation industry. It means France is keen to promote localization.
French groups are dedicated to hire more and more young Saudi nationals and to welcome more students.
Furthermore, France is the first touristic destination in the world that draws more than 80 million tourists per year and tourism industry is another field of common interest to discuss.
Financial services are another field of French excellence that has to be shown in the Kingdom and can also contribute to achieve the target of “a country of investment”.
During Deputy Crown Prince Mohammed bin Salman’s visit in Paris in last June, France and the Kingdom discussed several contracts and agreements in various fields such as defense, energy, health care, agriculture, transportation and infrastructure, culture, education and sport as well as sciences and technology, information, environment, housing, tourism and heritage.
A certain numbers of agreements and contracts are expected to be signed during the next session of the “Saudi – French joint committee”.

2016 Statistics of bilateral trade between France and Saudi Arabia

Although it is too early to announce statistics for 2016, it can be said that the bilateral trade between France and the Kingdom is going well.
As far as 2015 is concerned, France’s exports to Saudi Arabia increased by 6 percent up to 3.1 billion euros.
Conversely, our imports contracted by 25 percent to 5.3 billion euros because of the lower oil price.
With $15.3 billion of French foreign direct investment (FDI) in Saudi Arabia, France is the third biggest investor in the Kingdom.
More than 80 French subsidiaries have an active presence in Saudi Arabia, and most of the big groups of CAC40 (Paris Index) are represented in the Kingdom.
They employ about 27.600 people, including 10 000 Saudi nationals, a Saudization rate of 36 percent much higher than the average of the Saudi economy (16 percent).
Twenty-four Saudi companies are located in France (mostly by acquiring existing entities).
They employ 3200 persons directly and achieve a combined turnover of approximately EUR 350 million.
Saudi Vision 2030 and the National Transformation Plan will offer a lot of opportunities to develop new partnerships in many different fields: from tourism and culture to mining, including energy, transportation, agriculture, health, housing and many more, France is committed to bring the best of its technologies and know-how to accompany the Kingdom in its ambitious transformation program and to make it a success.
Paris can offer its expertise in privatization programs, especially in the water sector to Saudi Arabia.
Indeed France has long experience in PPP and privatization as it was the first country in the world to implement PPP in the 19th century with the first concessions for the water distribution networks.
French companies and state entities also have a long experience in privatization since the beginning of the 80s. France was at that time in the same configuration as the Kingdom today and can now share experiences in many fields such as energy, water, transportation and IT services for example.
An institutional cooperation could be implemented with ministries and national agencies.
France is one of the largest European countries that import large quantities of oil from Saudi Arabia.
Saudi Arabia is first partner of Paris in the region and France is one of the leading European countries importing Saudi crude.
French imports are mainly composed of oil and oil products and France’s bilateral trade is in favor of the Kingdom.

Saudi investments in France

One of France’s priorities is to increase and diversify Saudi investments in France which total less than 1 billion euros, and are mostly directed toward real estate.
France is the leading destination for foreign investment in industry and the fourth largest FDI receiver in the world.
The entrepreneurial and innovation policy is also proving effective, since France has been ranked as the leading country for R&D support and for newly founded businesses.
By easing the entrepreneurial process and fostering innovation, the French industry offers a lot of different investment opportunities for Saudi investors (public and private), and represents a major know-how transfer potential in a long term cooperation perspective.

French companies ready to participate in Saudi Arabia’s needs for solar plants.

Indeed, Energy sector is a cornerstone of our strategic partnership.
Various French companies are willing to work with Saudi Aramco, Saudi Electricity Company and KACARE.
Many delegations came to the Kingdom in order to work on renewable energy especially for solar projects.
The role of France to reduce carbon impact all over the planet must be reminded. Indeed, the COP 21 was a great success and Paris is determined to pursue those efforts by offering the best solutions. TOTAL, EdF and numerous groups already made proposals to work on solar investments.

Saudi housing projects

In this framework, French companies can also contribute to the Saudi housing projects by bringing their experience (delivery housing units on an industrial scale since the 50s), knowhow (rich eco-system of companies) and new technologies (smart cities, Internet of things, good build materials, etc…) in order to tackle the growing need of housing units in the Kingdom but also to have energy efficient units.
To build smart should be as important as to build quick and affordable.
France can contribute to the changing landscape of subsidies as described in the National Transformation Plan.
Thus, cheaper access to housing units for nationals of low and middle income categories will not comply with the Vision 2030 if these units perform poorly in operating cost notably for the end user when he will have to pay for electricity and water.