Our strategic objectives remain unchanged despite Covid: Saudi ambassador

Saudi Arabia’s Public Investment Fund in June announced a $1.5-billion investment in Jio Platforms for a 2.32 per cent stake. Another Saudi company Al- Fanar is executing a 300-Mw power project in Gujarat. Ahead of Saudi Arabia’s National Day on September 23, Saud Bin Mohammed Al-Sati, the country’s ambassador to India, discusses the progress on Vision 2030, in an interview with Jyoti Mukul. Edited excerpts:

Saudi Arabia is among the top five trading partners of India. How far has the trade basket diversified over the past few years?

Bilateral trade between Saudi Arabia and India has increased significantly in the last two years, from $27 billion in 2018 -19 to $34 billion in 2019–2020. Trade with Saudi Arabia accounted for 4.23 per cent of India’s total trade in 2019-20. India imports around 18 per cent of its crude oil requirement from us. The economic transformation of our two countries over recent years has also led to the diversification of our trade relations. Key commodities that India exports to us include rice, meat, electrical machinery and equipment, vehicles, mineral oil, organic chemicals, ceramic tiles, apparels, and commodities like chemicals, plastic products, aluminium, iron, steel, and copper. We expect our trade basket with India will further grow, especially in the food, pharma, and health care sectors.

 

With Covid-19 impacting the global economy, what are the issues on top of the G20 agenda?

After assuming G20 leadership, Saudi Arabia has set three goals -- empowering people, especially women and youth, safeguarding the planet, and shaping new frontiers, particularly relating to innovation and technology. When the pandemic broke out, the Kingdom was quick to take extraordinary measures to combat the crisis. The first was the Extraordinary G20 Leaders’ Virtual Summit on March 26, when they agreed to take all necessary measures to contain the pandemic. They also supported the strengthening of the WHO mandate in the fight against pandemics, including the delivery of medical supplies, diagnostic tools, treatments, medicines, and vaccines.

In response to the commitment made during the summit, the Kingdom of Saudi Arabia has pledged $500 million to support international organisations in combating Covid-19. A landmark outcome of the second virtual meeting of G20 Finance Ministers and Central Bank Governors was member countries agreeing to suspend debt service payments for the world's poorest countries through the end of the year.

Has the downturn impacted the progress in your country’s Vision 2030 plan?

To achieve the 96 strategic objectives of the Kingdom’s Vision 2030, the Council of Economic and Development Affairs established 13 Vision Realization Programmes. The targets set by these programmes are ambitious and aim to transform Saudi society. The numbers, so far, are reassuring. Foreign investment in Saudi Arabia grew at its fastest rate in 10 years in the first quarter of 2020, with a near 20 per cent rise in the number of new international start-ups. According to the World Bank Group’s Doing Business 2020 report, Saudi Arabia is the most improved country in the world for doing business and has implemented a record number of reforms in this area. The labour market statistics of the Saudi General Authority for Statistics in the first quarter of 2020 revealed the unemployment rate dropped to 11.8 per cent and is moving towards 7 per cent by 2030; remarkably the Saudi female unemployment rate decreased 2.6 per cent from the previous quarter. Another positive trend has been registered in the IT and digital sector. The Kingdom holds the third rank in the world in terms of growth of the digital economy.

Needless to say, the pandemic has impacted the global economy vastly. Even when we have been hit by a pandemic, our commitment to achieving the strategic objectives of Vision 2030 remain unchanged.

In what stage is Aramco’s plan to pick up a stake in RIL’s oil-to-chemical business? Is it still looking at investing in the mega refinery being planned by the Indian government-owned companies?

The discussions between Saudi Aramco and Reliance are ongoing. These are two different projects. The Ratnagiri project is an important investment for both of our countries. We look forward to seeing this project starting very soon.

How far the Kingdom’s vision to increase Saudi Aramco’s downstream has business progressed?

Saudi Aramco has recently announced the reorganisation of its downstream business to enhance integration across the hydrocarbon value chain and better position the company to drive financial performance, value creation, and global growth. The downstream business model will include four commercial business units: Fuels (including refining, trading, retail, and lubes); chemicals; power; pipelines, distribution and terminals. The company already holds a well-established downstream business, which focuses on creating growth opportunities across the hydrocarbon chain to expand the earnings and provide resilience during times of volatility in oil prices.

 

How far has the sustainable and green economy plan under Vision 2030 moved, and are there investment opportunities for Indian firms?

As a part of Vision 2030, we are promoting optimal use of our water resources by reducing consumption and utilising treated water, and protecting and rehabilitating our natural reserves and islands. The Kingdom has been successful in improving the billing system for water by installing one million high-precision electronic meters and linking them to the automatic reading system. Similar measures have been taken in the agriculture sector as we have rehabilitated 1,600 hectare in the south of the Kingdom which will rationalise water use, raise the efficiency of renewable water resources, and cultivate crops that are financially profitable for farmers. The Kingdom is increasing the use of renewable energy and the recent National Renewable Energy Programme (NREP) has set out a systematic roadmap to rapidly diversify the Kingdom’s domestic power supply and reduce dependence on oil and its greenhouse gas emissions.

The Kingdom’s Vision 2030 strategy aims to invest $50 billion to develop green energy projects to diversify power generation and reduce oil consumption. The sector has recently been opened to foreign investors. During Prime Minister Narendra Modi’s visit to Riyadh in October 2019, the two countries signed an MoU on cooperation in the field of renewable energy. Saudi Arabia has a comparative advantage in harnessing green energy, particularly solar and wind energy. Recently, Energy Minister HRH Prince Abdulaziz bin Salman announced the Kingdom’s decision to produce 50 per cent of its electricity from renewable sources by 2030. This, coupled with our ambition to drive energy diversification, opens a plethora of opportunities to foreign investors, including Indians.