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Saudi Arabia wants to be more than the world leader in oil production. In light of recent low oil prices, the country of 31 million people, with about half under 25-years-old, looks to diversify its economy.
Growing the private sector is a key component to that diversification and future economic growth, and the Saudi Arabian government is looking at the world’s number one economy—the United States--to be a partner and enhance bilateral commercial engagement in a way that benefits both economies.
The U.S. business community obliged. In January, the U.S. Chamber and the Committee for International Trade (CIT) at the Council of Saudi Chambers hosted the first U.S.-Saudi Arabia CEO Summit in Riyadh, Saudi Arabia, to grow trade and investment relations between the two countries.
Twenty-five U.S. business leaders, their Saudi counterparts, and diplomats from both countries laid the groundwork to address specific policy areas that can be translated into concrete policy recommendations for each respective government to act on.
A good foundation is already in place for building these ties. Dr. Abdulrahman Al-Zamil, Chairman of the Council of Saudi Chambers of Commerce, noted that 100,000 Saudi students study in the United States and will be bring home new ideas and fresh partnerships to bolster the U.S.-Saudi relationship. In addition, Saudi Arabia views U.S. technology as world leading and wants to expand technology cooperation and partnerships.
U.S. Ambassador to Saudi Arabia, the Hon. Joseph Westphal, said U.S.-Saudi trade is $19 billion a year and that the country is a top U.S. trading partner. The U.S. can help Saudi Arabia grow its economy, help its young people while also bringing about security, he added.
U.S. Chamber president and CEO Tom Donohue pointed out that the U.S.-Saudi alliance is not only strategic but also of shared commercial interests. In order to deal with geopolitical challenges, both the U.S. and Saudi economies must be strong; and the U.S. can directly support Saudi Arabia’s ambitions to advance diversification, stability, and employment.
Summit participants identified four areas where the Saudi business environment can improve:
- Visas. There has been dramatic improvement in getting them, but it would be ideal to be able to obtain a business visa upon arrival at the airport.
- Dispute Resolution. Moving this within the Council of Saudi Chambers of Commerce is a major step forward.
- Intellectual Property. Saudi Arabia can do better to protect IP.
- Licensing. The Saudi Arabian General Investment Authority (SAGIA) is changing the process for allowing for foreign investment licenses.
Health care is one particular sector that could see the benefits of an improved Saudi business environment. As part of its strategic transformation, the Saudi Ministry of Health (MOH) is building new facilities and intends to add 100,000 technical and nursing staff. There are private-sector opportunities in oncology, trauma, psychiatry, and rehabilitation centers.
Specifically brought up were four measures to reduce barriers to entry for biopharmaceuticals:
- Allow 100% foreign ownership.
- Enable rapid availability of new products--review and approved within six months.
- Ensure IP protection including five years for data protection
- Take advantage of a major opportunity for clinical research. In 2015, $66 billion was spent globally on clinical research, but Saudi Arabia attracted less than 1%.
Saudi Arabia wants to grow its private sector and is taking important steps forward. Its economic transformation offers American companies much to benefit as a partner. With U.S. know-how, the door is open to deeper trade ties between our two countries.