France announced on Tuesday a number of deals worth 10 billion euros ($11.4 billion) with Saudi Arabia during a visit by Prime Minister Manuel Valls.
“France-Saudi Arabia: 10 billion euros in contracts,” he wrote in a tweet. The deals cover energy, health, food, satellites and infrastructure, according to the prime minister’s office.
Earlier, Saudi and French enterprises alike presented investment opportunities to a large audience of business and community leaders at the second Saudi French Business Opportunities Forum in an effort to bolster a strategic partnership between France and Saudi Arabia.
With Saudi Arabia’s need to diversify its economy, France seeks to promote growth in its economy.
Minister of Commerce and Industry Tawfiq Al-Rabiah said that the Kingdom and France are striving to achieve strategic partnership.
He said the Kingdom enjoys diverse industrial base, congenial environment for private investors and simplified administrative and structural procedures which will help develop strategic partnership with countries like France.
He said the forum aims at achieving three major goals: To expand commercial exchanges to raise the flow of direct investments, to create business partnerships in implementing mega projects in coordination with the Saudi-French Business Council, and to implement the Forum’s recommendations by the agencies concerned.
Al-Rabiah said bilateral trade exchange is estimated at 12 billion euros and French investments in Saudi Arabia had reached 14 billion euros.
Valls welcomed Saudi investors to set up ventures in France, adding that the French government has cut taxes and reduced regulation in order to improve the economic environment and make Paris more competitive than other European capitals.
Enterprise leaders and representatives discussed ways to promote sustainable economic growth in both countries.
Addressing the forum, French Minister of State for Transport Affairs Fidali said that there are 80 French companies operating in the Kingdom and they have provided training for 27,000 Saudis.
“For the past three years, we have been striving to further expand and accelerate the economic cooperation between the two countries which resulted in the formation of the Joint Supreme Committee under the supervision of Deputy Crown Prince Muhammad Bin Salman, second deputy premier and minister of defense,” he said.
In his opening speech, Mohamed Ben Laden, President of the Saudi-French Business Council, called the forum “unprecedented” due to the opportunities it offered to strengthen political and economic relations.
He said that despite the recent decline in prices of oil posing a challenge to the Kingdom, Saudi Arabia remains the most stable country in the region. He said, “We have faced challenges like these before and come up stronger. We are the largest market in this region and the facilities offered by our government for investors are the best. As a result, we can also invest in conglomerates and small and medium size enterprises.”
France and Saudi Arabia share a history of bilateral ties in trade and commerce, said Julien Maze, CFO of Banque Saudi Fransi. “The key elements are long-term commitment, good chemistry between the partners, and to have expertise that is valued and useful.”
According to CEO of Alsaif Engineering Contracting Salim Al-Aydh, potential sectors of investment are energy and water desalination.
Philippe Varin, Chairman of Areva, equally encouraged further development in the energy sector, referring to it as a major pillar in a country’s development.
The investment plan in the transportation sector, prepared by the Ministry of Transport in cooperation with the Saudi Arabian General Authority for Investment (SAGIA), also identified 36 promising investment opportunities potentially worth up to $25 billion. They include manufacturing of buses and train coaches, spare parts and technical support services in the establishment of infrastructure work, operations, maintenance and training.
SAGIA’s Executive Director for Investment Development Faisal Bafarat, speaking at a session on promoting sustainable economic growth revealed there are 194 projects in the Kingdom partly or fully-owned by French companies with a total capital of about SR75 billion.
He said SAGIA’s ambition was to double the size of these investments in light of the various incentives offered by the Kingdom and its attractive environment for domestic and foreign investments.
Inviting French investments, Bafarat said, “the Saudi economy is the largest in the region and one of the 20 largest in the world.” He added the Kingdom’s GDP doubled in the last 10 years reaching to about $752 billion in 2014, with a growth rate of 129 percent.
Saudi investors also pointed out that the government had taken steps to develop human resources and diversify the economy. In addition, they emphasized training young Saudis entering the job market.
CEO of Business France Muriel Penicaud presented reasons to invest in France, referring to France’s high level infrastructure, openness to invest, competitive set up costs, productive workforce, its aim for innovation, its growing Gulf presence, and more.
By Layan Damanhouri
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