Saudi Prince arrives in UK with charm offensive and $90bn in trade deals

UK PM Theresa May Saudi and Crown Prince Mohammad bin SalmanThe UK and Saudi Arabia this week agreed to boost mutual trade and investment between the two countries to as much as $90bn over the next few years, as the one looks for alternative trading partners to the EU post Brexit while the other looks to diversify its economy away from oil. The agreement was reached at a meeting yesterday between Prime Minister Theresa May and Crown Prince Mohammed bin Salman Minister at the beginning of a three-day visit to London and was immediately welcomed by Downing Street as a “vote of confidence” in the UK economy as it prepares to leave the European Union. By a happy alignment of the stars, the growing urgency within UK political and business circles to find new markets for its goods and services comes at a time when Saudi Arabia looks to adapt to a world where it can no longer rely on its oil fields to prop up its economy – and to meet the aspirations of its young and increasingly well-educated population.
Set out by the Crown Prince in the Kingdom’s Vision 2030 blueprint some 18 months ago, Riyadh’s answer to this challenge has been to target eight key sectors that it believes can help generate both growth and jobs – mining and metals, petrochemicals, manufacturing, tourism and hospitality, retail and wholesale, healthcare, construction and finance. The total cost of the infrastructure and technology transfer required to develop these industries has been put at around $4trn.
The UK is already Saudi Arabia’s second-biggest supplier of defense equipment and London-based based BAE Systems has been waiting for a follow-on order for the Eurofighter Typhoon fighter jet after the controversial Al-Yamamah sale of 72 of the warplanes in 2006. While a deal would boost U.K. industry as Britain tightens its own defense spending, the Crown Prince’s visit been met with demonstrators protesting against Britain’s arms sales to Saudi Arabia, as well as the ongoing war in neighboring Yemen.
Saudi AramcoAlthough Theresa May has raised “deep concerns” over the humanitarian crisis in Yemen with Saudi Arabia’s Crown Prince, she will be only too aware that London is vying with New York for the right to host the IPO of the state-owned Saudi Aramco oil company later this year. Vision 2030 was “an ambitious blueprint for internal reform that aims to create a thriving economy and a vibrant society — conditions that we agree are essential to the kingdom’s long-term stability and success,” a spokesman said. 

Source: Bloomberg