Saudi Arabia’s crown prince is in Asia forging new ties and seeking deals as he tries to keep his dream of economic transformation alive following a chill in relations with the West.
Mohammed bin Salman wrapped up his visit to Pakistan on Monday with agreements worth $20 billion — including one to develop alternative energy — before heading to India and China, both big buyers of Saudi oil.
But his trip is about much more than energy. The crown prince is spearheading efforts to diversify the kingdom’s economy away from what he once called an “addiction” to oil.
For that he needs foreign investment and expertise. Bin Salman will be looking to India and China for both.
His plan, dubbed Vision 2030, aims to reduce unemployment, grow the private sector and develop industrial, tourism and entertainment hubs over the next decade.
“[The] visit to Asia holds geo-strategic and socioeconomic importance, both aspects being very important for the success of the Saudi Vision 2030 with reference to the timings of these visits,” said Euromonitor International senior analyst Rabia Yasmeen.
“The visits will provide the crown prince an avenue for developing closer relationships with the governments in these countries and improve a positive image among the masses,” she added.
Saudi Arabia’s international reputation, and bin Salman’s personal standing, have plunged since journalist Jamal Khashoggi was murdered at the Saudi consulate in Istanbul in October. US intelligence officials believe the killing could not have been carried out without bin Salman’s knowledge. Saudi authorities have denied those claims.
Shunned by the West
The crown prince’s showcase investor conference in Riyadh later that month was shunned by many of its A-listers, including Siemens (SIEGY) CEO Joe Kaeser and JP Morgan CEO Jamie Dimon. Richard Branson canceled plans to help develop Saudi tourism, and other foreign executives distanced themselves from a flagship project called Neom to develop a futuristic city.
It left others such Masayoshi Son, CEO of Japan’s SoftBank (SFTBF), in a tough spot. He raised nearly half the cash for his $100 billion Vision Fund from Saudi Arabia. Son expressed “strong regret” over the Khashoggi killing but said his company couldn’t sever its financial ties to the kingdom.
Asian leaders, including those in India, have been less critical of Saudi Arabia’s role.
“I imagine any differences would be communicated privately and India sees no inherent benefits to public condemnation,” said Dhruva Jaishankar, who tracks New Delhi’s foreign policy for the Brookings Institution.
“Vision 2030 … offers some potentially exciting opportunities including investment in Saudi Arabia [and] offering services in software and educational opportunities,” he added.
India’s business relationship with Saudi Arabia already runs deep and is growing. Trade between the two countries rose about 10% in 2018 to reach $27.5 billion, and India imports 17% of its oil from the kingdom.
Nearly 3 million Indians live in Saudi Arabia. Many of them work as laborers in construction or as domestic helpers. Better paying jobs may be available in the future.
“Changes are afoot, so I would expect a higher emphasis on services and education, including high skilled migration and two-way investment, energy diversification, and a deepening of security ties,” said Jaishankar.
Seeking investors and tourists
After his stop in India, the crown prince will head to Beijing.
Bin Salman will follow in the footsteps of his father, who led a massive entourage to China in 2017. Back then, Asia’s growing demand for oil was central to King Salman’s trip.
Now, there’s a need for even closer cooperation.
“The visit is expected to bring more fruitful results on the economic front with regards to China’s One Belt, One Road Initiative and how the Saudi government can leverage the initiative for its Saudi Vision 2030,” Euromonitor’s Yasmeen said.
China’s ambitious initiative is aimed at reshaping international trade by financing the construction of roads, railways and ports to improve links between China and other regions, including the Middle East and Europe. China is Saudi Arabia’s largest trading partner and imports from the kingdom stood at $46 billion in 2018.
Saudi Arabia also hopes to attract more tourists from Asia. Boosting visitor numbers is a central plank of the country’s economic transformation. Millions of Muslim pilgrims visit each year and Riyadh wants to boost that number to 30 million by 2030, as well as attracting other tourists.
Rishi Iyengar and Yong Xiong contributed to this report