Saudi Arabia and the U.S.’s economic relationship spans eight decades of a deep and robust partnership—and one that extends far further than merely history developed over oil. Indeed, with the approaching historic visit from President Donald Trump, the U.S.’s integral role in broadening out Saudi Arabia’s economy has emerged at the forefront of the international gaze.
The inaugural Saudi-U.S. CEO Forum in Riyadh will coincide with President Trump’s visit, and offer a stage for a multitude of bilateral agreements between Saudi and U.S. CEOs. The range of business partnerships signed will create thousands of jobs for Americans in the United States, all while driving diversification across the Kingdom of Saudi Arabia.
Cementing a Storied Economic Foundation
At the recent U.S. Chamber of Commerce summit of U.S. and Saudi CEOs, Secretary of State Rex Tillerson addressed the role of trade and investment in the U.S.-Saudi bilateral relationship.
“We have a long relationship with Saudi Arabia that goes back over 80 years, and our support for a strong and steady partner on economic cooperating remains firm,” Secretary Tillerson said. “When U.S. companies invest in the Saudi economy, everyone wins. The U.S. creates jobs at home, and businesses in the Gulf region get the best business partners that the global marketplace has to offer.”
In 2016, the U.S. exported $18.0 billion in goods to Saudi Arabia, while importing $16.9 billion in goods from the Kingdom. In the same year, the U.S. recorded a trade surplus with Saudi Arabia of $1.096 billion.
For the U.S., Saudi Arabia reflects one of the U.S.’s biggest trading partners in the Middle East. Saudi investment in the U.S. has increased by 10 percent each year; from 2010 to 2015, Saudi Arabia invested some $58.7 billion.
It works both ways: for Saudi Arabia, the U.S. remains the Kingdom’s largest trade partner and foreign investor.
U.S. investment in Saudi charts $19.2 billion in contributions, with the number continually increasing. Corporations, such as General Electric and Exxon Mobil, have routinely invested billions of dollars in the Kingdom, reflecting a lucrative environment that encourages foreign investors to tap into the promise of Saudi Arabia’s rapidly diversifying economy. Since 2016, American companies, including Oracle and Del Monte, have made 11 investments in the Kingdom. Major American companies have operated in the Kingdom since the 1930s; General Electric, Pfizer and Honeywell represent three of the 26 Fortune 100 companies with a footprint in Saudi Arabia.
A Vision to Attract U.S., Foreign Investment
Saudi Arabia is on a clear-cut mission: by 2030, the Kingdom aims to reach recognition as a global powerhouse at the epicenter of the Arab and Islamic worlds.
The Kingdom’s ambitious economic vision has propelled the nation’s economy, and trade footprint in the U.S. and around the world. For the nation, the focus remains on modernizing society to continue fueling one of the world’s fastest growing economies. To do so, moving the Kingdom from government-led to market-driven remains crucial.
Vision 2030’s sweeping economic diversification program have welcomed a myriad of reforms to invigorate public-private partnerships, and make way for American companies to carve their place in a lucrative and expanding market. Already, the nation has recorded a cut in the budget deficit and 46 percent increase in non-oil revenue. Looking ahead, Saudi Arabia has outlined plans to privatize 5 percent of Saudi’s state-owned oil company Aramco—a move that would raise billions, and go toward building out other sectors of the Kingdom’s economy, such as mining and the domestic arms industry. From renewable energy projects to the tourism sector and automobile market, Saudi Arabia’s economic initiatives have opened the nation to ripe demand.
Saudi Arabia has further committed to expanding female participation across the workforce—an entry-point not missed by leading companies operating in Saudi Arabia. In March 2017, Ford Motor Company held its first women-only workshop in Jeddah to address the importance of equipping women with the resources to contribute to the Kingdom’s economy. In May 2016, GE announced it would open 4,000 new jobs in Saudi Arabia, as well as a launch a training program for Saudi women.
Under Vision 2030, the Kingdom’s IT sector will make up 2.24 percent of the nation’s non-oil GDP. In 2016, the Saudi telecommunications and IT market—the largest in the Middle East—grew by 8 percent to reach $35 billion.
With President Trump’s approaching visit, Saudis, Americans and global onlookers alike will watch with anticipation for the initiatives and agreements that will follow the President’s two-day visit. The Saudi-U.S. economic relationship represents a partnership that has remained firm over the past eight decades, and a model for opportunity that stems by merging two of the world’s most powerful economies to fuel an ambitious but attainable economic diversification plan.