A ccompanied by an entourage of up to 1,500 people and 459 tons of luggage and equipment, the Saudi monarch this week kicked off his monthlong trip to Asia in Malaysia and Indonesia. A range of deals were soon signed, including one in which Saudi oil giant Aramco bought a $7 billion stake in a major refinery project in Malaysia.
“As both an investor as well as a target for investments, Saudi Arabia will increasingly turn to the Asian economies,” says Gary Grappo, a former US ambassador who was stationed in Saudi Arabia in the past, adding that Asian countries were likely to account for the biggest share of Saudi oil exports.
The ultra-conservative kingdom last year launched Vision 2030, an economic transformation plan spearheaded by Deputy Crown Prince Mohammed bin Salman. At its core lie a planned reduction of Saudi Arabia’s dependency on oil and an opening to foreign capital. Market observers anticipate the partial privatisation of Saudi Aramco, in what could turn out to be the largest initial public offering in history.
However, gaining external support for Vision 2030 is only one part of the equation, as Saudi officials acknowledge that much will hinge on approval at home. The kingdom’s “religious establishment objects to certain aspects of Vision 2030 such as the empowerment of women, sports and entertainment,” Giorgio Cafiero, co-founder of Gulf State Analytics, told The World Weekly, noting that tensions could undermine efforts to diversify the economy.
The modern state of Saudi Arabia has its roots in an alliance between the al-Saud family and the the ultra-conservative Wahhabi movement forged in 18th century central Arabia. The latter’s interpretation of Sunni Islam is Saudi Arabia’s official religion until today, and has spread around many parts of the Muslim world due to Saudi funding.
Ambassador Grappo told TWW the most important stop of the Asia tour will be in China in mid-March. “The Saudis see China as a growing global economic superpower and want to ensure its economic relationship with China continues,” Mr. Grappo said, while cautioning that Beijing could not - and did not wish to - replace the US as “Saudi Arabia’s most important strategic ally”.
Asia’s economic transformation over the last 25 years might hold clues for Riyadh’s own vision, the former US diplomat concluded.