Facts

Official language: Arabic

Capital: Riyadh

Largest cities: Riyadh, Jeddah, Mecca, Medina

King: Salman bin Abdulaziz al-Saud

Area: 12th in the world (2 149 610 sq. km)

Population:
Estimation (2016): 32 275 687
Density: 12 p/km²

GDP:
Total (2016): $646,4 billion

Currency: Saudi riyal

Negotiations between Russian President Vladimir Putin and Crown Prince of the Kingdom of Saudi Arabia Mohammad bin Salman Al Saud held in Sochi on October 11, 2015.

The meeting addressed issues of bilateral relations, including terms of implementation of agreements reached in June this year during the previous visit of His Highness to Russia. According to the Russian Foreign minister Sergey Lavrov, both sides noted very good opportunities in different fields, including economics, investment, aerotechnical cooperation. Particular attention was paid to the situation in Syria. “We have cooperated closely with Saudi Arabia on the issues of Syrian crisis for years. The Russian President Vladimir Putin has confirmed our understanding of the concerns arising in the Kingdom. It was confirmed the full coincidence of goals that Saudi Arabia and Russia pursued concerning Syria: first of all, prevention of the triumph of terror caliphate in Syria”, — said the Russian minister. The second goal that unites Moscow and Riyadh is to ensure national reconciliation prevailed in Syria. 

Both sides noted that the negotiations were outspoken. The meeting discussed ideas of practical implementation of the June 30, 2012 Geneva Communique, and expressed the different approaches that countries have agreed to take as a basis for further work. This issue was discussed also by the foreign ministers Sergey Lavrov and A. Al-Jubeir with US Secretary of State John Kerry at the beginning of August during the meeting in Doha. The problem was discussed also in Moscow in September 2015 when Mr. A. Al-Jubeir visited Russia.

Russia is keenly interested to strengthen its cooperation with Saudi Arabia in light of its importance. During negotiations with His Highness Successor of the Crown Prince of the Kingdom Mohammad bin Salman Al Saud, Vladimir Putin specially noted the intention to make cooperation more substantive.

According to the King Abdullah bin Abde­laziz International Center for Interfaith and Intercultural Dialogue, the monarchy extends a hand of friendship to people of all faiths and cultures — a message to its own people, the broader region, and international commu­nity.

Saudis are working tirelessly to strengthen and diversify the economy. This effort also includes a plan currently ste­ered by Deputy Crown Prince Mohammad bin Salman in his capacity as Chair of the Council of Economic and Development Affa­irs. He presented a longterm vision of investment opportunities in mining, finance, downstream oil and gas, healthcare, retail, entertainment, and infrastructure development. It is a global vision, stretching beyond Saudi Arabia’s traditional alliances to include new and growing friendships, notably with Russia. Witness the young prince’s visit to Saint Petersburg in June, where he met with President Putin and his cabinet: the Kingdom’s Sovereign Wealth Fund ag­reed to invest $10 billion in Russia in projects for infrastructure, retail, logistics and agriculture over a period of up to five years.

Riyadh aspires to reach new understandings with Russia on a range of political, economic, and military issues of mutual concern. Both countries reject extremism and terror. They share a desire to foster national reconciliation, civil peace, and prosperity in Syria, Iraq, and other flash points of conflict. As they explore together their differences, as well as their commonalities, in how to achieve these goals, Riyadh will work tirelessly to establish a firm basis for friendship with Russia, and its people for years to come.

The Happiness Index

In 2015, on the background of the tragic events of the civil war and chaos, the UN in their study on the global “happiness index” called the Middle East and North Africa the most unhappy regions of the world. One of the few bright spots were in Saudi Arabia: there, according to experts, the population is much happier than most of their neighbors. The reason, according to psychologists, who tried to look at this situation from the outside, derived from a combination of public and financial security, development of public services at the same time preserving traditional family values, while in some neighboring countries there is fear and chaos and huge numbers of refugees have lost their homes.

Meanwhile, Saudi experts understand that even these — to the untrained eye irrele­vant — benefits give to the population of the KSA tangible sense of confidence and serve as an impetus for positive changes in the country such as adoption of the more stable role of their country in regio­nal and world affairs. It gives strength to withstand external threats to civic peace, inspires new achievements in the social sphere, in particular in the field of women’s rights, encourages the implementation of new economic programs, while encouraging public tolerance. This is the updated vision of the future.

The Qatar crisis is the real failure of U.S. policy in the region

Or so says the Extraordinary and Plenipotentiary Ambassador, member of Russian international Affairs Council (RIAC) Alexander Aksenenok. According to the expert, “in the current situation in the Middle East, taking into consideration all Middle East conflicts, especially Syrian, the conflict in the Persian Gulf appears to be starting a dangerous trend”. The danger of this trend is that major non-regional powers are increasingly becoming hostages of a narrow and ambitious interests of a regional players, whose role in the conflict in recent years has increased substantially. “Qatar crisis is the first real failure of American Middle East policy in the Persian Gulf region,” — said Aksenenok during the presentation of the report “Middle East: the darkness before the new dawn? Regional conflicts and the future of the world” on the site of the International discussion forum “Valdai”.

Turki Aldakhil,
general manager of Al-Arabiya, the most popular news channel in the Arabic language, and founder of Al-Mesbar Center for Studies and Research in Dubai

The Capital

The modern city of Riyadh, which can be roughly translated as “gardens,”was founded on the site of the first town captured by Ibn Saud. The tip embedded in the main door of Fort Masmak (Masmah) is a fragment that is the very spear that killed the Turkish Governor. Aside from the Fort and a few traditional palaces near the Plaza Deer, little of the old city has survived — only some relics east of “Rabat,” with its winding maze of narrow streets, mud houses, covered bazaars, and a fortified Palace. In Riyadh there are around 140 mosques, each of which is a work of art. 

One of the landmarks of the city is the Royal Centre (Kingdom Centre), the highest building in Saudi Arabia. Owned by a Saudi prince, it contains a complex of modern offices, apartments, the Four Seasons hotel, a three-level shopping centre, and many first-rate international restaurants. 

Other noteworthy buildings include the Ministry of Information, with its 176-foot tower; the picturesque complex of the Ministry of Foreign Affairs, created in the finest traditions of modern Islamic architecture; the stadium of King Fahd, in the form of a large Arabian tent; the national library of King Fahd; the zoo; the King Khalid International Airport (one of the largest in the world, receiving more than 16 million passengers annually); the equestrian club; and the 93-kilometer beltway around the city.

 

The gates to Mecca

The Saudi Commission for Tourism and Antiquities (SCTA) plans to promote Jeddah as a tourist destination. It is the second largest city in the country, which is also the “gateway” to the two main shrines of the Muslim world, Mecca and Medina. 

A marketing campaign which began with the launch of the Internet portal www.visitjeddah.com presents images of the most promising tourist destinations in Saudi Arabia. The president of the SCTA, Prince Sultan bin Salman, has actively promoted Jeddah at the Saudi Travel Fair for investment. As indicated earlier, Jeddah is located on the Western coast of the Arabian Peninsula. It is the oldest city in the country, dating back more than two thousand years. In the middle of a huge modern metropolis lie trace vestiges of the old town, lost among the mirrored skyscrapers. 

Modern Jeddah stretches along the coast for more than 80 kilometers, and continues to grow. It is less hot and dry than most of the territory of Saudi Arabia, due to its the proximity to the red sea. Jeddah is one of the most prosperous cities in the country. Its wealth is based not only on oil, but also on centuries-old commerce, the main occupation of the locals since time immemorial.

 

National Museum

The National Museum of Saudi Arabia is a part of the historic city centre of King Abdul Aziz. The building was built in 1999 by renowned Canadian architect Raymond Moriyama. Its Western facade along the square Murabba evokes a crescent pointing towards Mecca. 

The building is divided into eight sections. Exhibitions trace the history and development of Saudi Arabia and other countries of the Arabian Peninsula. They also portray the values of the kingdom, the adherence to religion, and other themes with bearing on the development of humankind as a whole.

 

The Royal horses

“Al-Mohammadia” is the largest and most famous stud farm of Saudi Arabia. Located 70 kilometers from Riyadh, it consists of 80 stalls, a grassy paddock, a veterinary clinic, and a swimming pool for horses. In addition to the Arabian mares that participate in shows and exhibitions, there are also breeding horses for racing. Members of the royal family take part in international competitions and champion the sport.

At the Olympic games in London, Prince Abdullah bin Miteb Al Saud, whose international career began in 2002, was a part of the Olympic team of Saudi Arabia. Prior to that, he practiced at home, and also spent two summers with Stephen Hadley, an English trainer. In 2006, Prince Abdullah held a two-year training contract with Hank Noren in the Netherlands, and in 2011 he won a gold medal with his teammates at the pan-Arab games in Doha. In show jumping, the prince became an ordinary person. To win, Miteb Abdullah bin Al Saud trained for seven hours per day. Rewarded for the works he won the bronze Olympic medal. 

The main sponsor of Saudi Arabia team in show jumping is an Equestrian Fund of Saudi Arabia, “Furusiyya”, which also signed a contract with the International Federation of Equestrian Sports about general sponsorship of the Nations Cup in show jumping. The total amount of the contract is $ 4 million and a prestigious series of international tournaments will receive one million annually until 2016.

Seven wonders of the Kingdom

Why should Russian businessmen take an interest in the Kingdom in the Persian Gulf? There are at least seven good reasons.

  • The Kingdom of Saudi Arabia (KSA) is one of the fastest-growing and most stable developed countries in the Middle East — and it’s the most dynamic market in the Persian Gulf region. In 2016, Russia’s trade with Saudi Arabia amounted to $ 491 676 921. But this, in the opinion of both parties, is far from the limit.

  • Saudi Arabia possesses huge financial resources. Its GDP makes up approximately 25 percent of the total GDP for all Arabic countries. Since June 2015, Saudi stock market is open to foreign investors. Its volume is estimated at $ 590 billion — more than in all the Gulf countries combined. A Saudi Stock Exchange (Tadawul) — is the 11th largest in the world.

  • Saudi Arabia is the leader of the Arab World, and it is a kind of trade gateway to the Middle East countries. In addition, the Kingdom is ranked second in the world after the US in terms of international money transfers, the total amount of which is equal to about $ 583 billion. 

  • The private sector is well-developed, and public-private partnership (PPP) is common in the Kingdom. Saudi Arabia provides all the conditions necessary for collaborations with Russia. The reciprocal visits of the nations’ leaders, as well as the contacts they develo­ped, and a strong legal basis for Russian and Saudi economic collaboration have all contributed to this favorable atmosphere. KSA will invest $ 10 billion to Russian investment projects through a partnership created by the Russian Direct Investment Fund (RFPI) and the Saudi sovereign fund Public Investment Fund (PIF). The amount will be allocated for 4 – 5 years. Prio­rity sectors for partnership will be infrastructure, agriculture, medicine, logistics, retail.

  • The Kingdom is the largest producer of energy resources. National oil company Saudi Aramco controls 99% of the country reserves, which is about a quarter of the world’s proven reserves. It has branches, joint ventures and subsidiaries in China, Japan, Philippines, Republic of Korea, Singapore, UAE, USA, UK. It also cooperates with Russia. The company has its own tanker fleet. 

  • But at the same time Saudi Arabia has made great efforts to diversify its economy and keep pace with the era of high-tech.

  • Finally, Saudi Arabia is one of the few countries in the world that is almost never exposed to the negative effects of global economic crises. It remains a stable monarchy that continues to conduct significant construction and infrastructure projects. At the same time, Saudi investors are very interested in the Russian market as well as its scientific developments and research.

Moscow and Riyadh: A Palette of Opportunities

In February 2016, Moscow and Riyadh celebrated ninety years of diplomatic relations. The Soviet Union was the first non-Arab country to recognize the Kingdom of Saudi Arabia back in 1926.

On September 17, 1990, modern Russia and KSA adopted a declaration proclaiming the renewal of diplomatic relations. In November 1994, the head of the Russian government, Viktor Chernomyrdin, visited Riyadh on his tour of the Countries of the Council on Collaboration of Arabic Countries of the Persian Gulf. During the visit, officials signed a general intergovernmental agreement on economics and trade. The document covered topics such as capital investment, science, technology, culture, sports, and youth policy. 

Reciprocal visits by the Russian and Saudi leaders have become a propitious tradition for the relationship between the two countries. In November 2003, Abdallah bin Abdulaziz Al Saud, at that time the successor to the throne (in 2005 – 2015, the King and the Custodian of the Two Holy Mosques), came to Moscow and had a meeting with President Vladimir Putin. The parties signed a number of agreements on oil and gas, science, and technology.

In February 2007, Putin visited Saudi Arabia. It’s an event worth considering in greater detail as the relationship between two countries began to center around strong business ties. Several agreements were signed at the meeting: an agreement canceling double taxation; a memorandum of understanding and collaboration in the field of culture; a memorandum of understanding and collaboration between the Foreign Trade Bank, Roseximbank, and the Saudi Development Fund; an agreement on collaboration between the Saudi Information Agency and the RIA Novosti Аgency; and an intergovernmental agreement on aircraft operations. 

Plus, given the presence of Rosoboronexport representatives among the members of the Russian delegation, it’s likely that they also discussed collaborating in this field. As KSA officials have said, the Kingdom sees no obstacles to cooperation with Russia in any areas, including arms and atomic energy develop­ment. 

During a meeting with representatives from Saudi business circles, Putin stressed that Russian companies, such as Lukoil and Stroytransgaz, actively work in the Kingdom. At the same time, the president of Russia suggested extending the “palette of opportunities” for bilateral collaboration in the metallurgical industry, atomic energy, and high-tech as well as joint participation in the development of transportation infrastructure. The parties also discussed the prospects of interaction in the field of space. Finally, Putin noted Russian business’s interest in an influx of investments from Saudi Arabia. King Abdallah, in an interview with Izvestiya, said that the two countries had “huge economic potential,” and he underlined the importance of a scientific exchange in educational and technical areas. 

King Abdallah awarded the Russian president Saudi Arabia’s highest honor, which is handed to heads and leaders of foreign countries. At the presentation ceremony, the King said he considered President Putin an outstanding statesman and a fighter for peace and justice: “The Kingdom of Saudi Arabia is reaching out a hand of friendship to Russia and believes that this friendship will be strong and long-lasting. We expect kindness and devotion from our friends, and in turn, we promise to give the same.”

The Kingdom also recognized the work of one of the members of the Russian delegation: the president of the Republic of Tatarstan, Mintimer Shaimiev, was awarded the International Prize of the King Faisal for Tireless Service to the Cause of Islam and Muslims. The ceremony took place under the aegis of the King and in the presence of President Putin. According to some experts, it was a symbolic act: bilateral relations are mostly conditioned by the factor of inter-Russian Islam. 

In short, the bilateral relations were given a new incentive. 

Back in October 2002, an intergovernmental Russian-Saudi commission on economic, scientific, and technical collaboration was created. In May 2005, in Riyadh, the commission held its second session; the third session, in June 2010, was held in St. Petersburg. Since 2002, modeled on the Russian-Arabic Business Council, the Russian-Saudi Business Council (RSBC) was established. 

RSBC together with the Chamber of Commerce and Industry of the Russian Federation regularly holds business forums and delegation exchanges. In October 2009, in Jeddah, there was an inter-regional exhibition: “Russia and the Kingdom of Saudi Arabia.” In June 2010, in Moscow, there was an RSBC exhibition, “Arabia-Expo,” that Saudi companies took part in. In March 2011, in Jeddah, entrepreneurs from the two countries gathered for “A Week of Russian Business in Saudi Arabia,” in which more than seventy representatives of Russian companies participated as well as a delegation from Republic of Bashkorto­stan. 

Сooperation on outer space is also develo­ping. Since September 2000, Russian carriers have moved fourteen Saudi satellites out of near-Earth orbit and into space orbit. Since 2008, Roskosmos and the Saudi Ministry of Foreign Affairs, along with private-sector Saudi partners, have been working, in particular, on forming a legal agreement on various joint projects: on cooperation in the field of research, on the use of outer space for peaceful purposes, and on development and joint use of GLONAS.

At that time, mutual visits at the ministry level in the field of energy started. 

Since 2008, KSA government officials decided to reduce wheat production, and starting from 2016, the Kingdom will not produce it at all. As a result, the Ministry of Agriculture of the Russian Federation and concerned Russian companies started to develop opportunities for increased supplies of Russian grain to KSA as well as opportunities to attract Saudi investment to the agro-industrial complex. In December 2012, the two nations signed a contract forming the joint enterprise SAHO-MENA (Middle East & North Africa). Its aim was to organize supplies of Russian grain products, up to four million tons per year, to Saudi Arabia.

In December 2008, the representatives of the Bank of Russia and five Russian commercial banks, headed by the first deputy to the president of the Central Bank of the Russian Federation, Aleksey Ulyukaev, visited Riyadh. In 2010, the two countries weathered the global financial crisis and recession thanks to ongoing mutual trade in 2008 and 2009. In the first half of 2011, Russia mainly exported base metals and products made from them, such as machines, equipment, vehicles, and instruments. (In 2010, agricultural products were exported as well). Russia’s main items of import at that time were chemical products, foodstuffs, and agricultural raw materials.

Now Russian companies Lukoil Overseas, Stroytransgaz, Globalstroy-Engineering, SC Company group EVROKOR (SAUDI EURACORE Co.), and PharmEco all have projects in KSA. In June 2010, at the St. Petersburg International Economic Forum, a delegation from Saudi Arabia — headed by the KSA General Investment Agency chief — held a number of meetings with Russian officials and businessmen. In May and June 2011, representative delegations of Saudi businessmen conducted a number of visits to Moscow, St. Petersburg, Kazan, and Ufa. 

There was also an increase in scientific collaboration. A memorandum of understanding signed on September 2, 2003, established direct relations between the Russian Academy of Sciences (RAS) and Saudi Arabia’s largest scientific and technical centers; the information and research center at the KSA Ministry of Foreign Affairs; and the KSA Institute of Astronomy and Geophysical Studies. The most active Russian cooperation is coming from the RAS Institute of Astronomy, the RAS Institute of Oriental Studies, and the Institute of Earthquake Prediction Theory and Mathematical Geophysics.

The embassy of Saudi Arabia in Moscow, through the Council of Russian Muftis, provides financial support to develop Muslim religious education for schools in Tatarstan alongside other Russian Federation subjects. In 2004, the first group of Saudi students traveled to Russia to study on a limited basis. Since 2002, Russian hajj missions have provided support to Russian pilgrims. (The Russian Council of Hajj at the Commission on Religious Organizations organizes the missions.)

More than 20,000 pilgrims visit Muslim sanctuaries in Mecca and Medina annually. In June 2008, KSA was visited by a delegation from the Council of Russian Muftis — headed by the council’s leader, Ravil Gainutdin—to take part in an international conference, “Contemporary Global Issues and Problems,” under the King of Saudi Arabia’s patronage. This event anticipated Madrid’s Forum for Inter-Religious Dialogue, part of the Saudi monarch’s initiative on strengthening confidence among world religions.

In May 2009, a delegation from the KSA Ministry of Foreign Affairs took part in a session at the eleventh international Likha­chev “Dialogue of Civilizations” in St. Peters­burg. 

In March 2010, the Russian Ministry of Culture asked Saudi Arabia to participate in a collaborative cultural project for 2011 to 2013. In April 2011, a delegation from the KSA Ministry of Culture traveled to Tatarstan to take part in the opening ceremony of the King Abdallah bin Abdulaziz Al Saud Library at the Russian Islamic University. 

From May to September 2011, in the State Hermitage, there was a Saudi archeological exhibition, “Roads of Arabia,” where the unique exhibits included in the list of world UNESCO heritage were displayed; the event was visited by more than 60,000 people. 

The list of collegial acts between the two countries is ongoing. Besides, the main events are yet to come. 

Materials of the CCI of the RF were used

Salman bin Abdulaziz Al Saud —

The King of Saudi Arabia and the Custodian of the Two Holy Mosques

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Salman bin Abdulaziz Al Saud was born on December 31, 1935 in Riyadh. He was raised in the Murabba Palace and received his primary education in the school of princes, established by the King Ben Saud for his children. He studied religion and modern science. At the age of ten he already knew the full text of the Кoran. 

In February 1963, Salman was appointed as Governor of the province of Riyadh and stayed in power for 48 years. During the years of his reign the city grew into a major metropolis. The Governor made a bid for the development of tourist industry and attraction of investments, gathering a team of young and highly qualified technocrats.

In 2011, Salman became a Defense Minister. The newspaper Al Akhbar claimed that the appointment was due to his abilities in negotiation and his diplomatic talent, as well as thanks to him belonging to the middle ge­neration of the Royal Family (which allowed him to mediate between its influential fathers and sons) and wide contacts he had in the Arab world and the international sphere.

In June 2012, Salman became a crown Prin­ce of Saudi Arabia and rose to the position of the Deputy Prime Minister.

In January 2015, honoring his coming to power, Salman ordered remuneration of civil servants, pensioners and students in the amount of to two monthly payments and awarded pardon to 500 thousand civilian prisoners. $20 billion was allocated for the construction of new buildings for the provision of electricity and drinking water. The financial assistance was also issued to the football clubs of the Super League of the Saudi Arabia, literary clubs, charities and trade unions. Salman bin Abdulaziz Al Saud has taken significant steps to further develop integration of the Kingdom with the international community. 

Salman and Putin:

Crowning the efforts to build a strategic relationship

King’s Salman’s visit to Russia crowns Sa­­­udi efforts to formulate a strategic relationship with Russia, one serving the interests of both countries. Russia’s president, Vladimir Putin had invited the King more than once but it seems that Saudi Arabia had preferred to make the visit after resolving the sensitive issues between both countries. Perhaps the Saudis also considered clearing the clouds with the United States first, especially since their partnership reached its lowest during president Barack Obama’s tenure. 

After the election of Donald Trump, Saudi Arabia extended him an invitation to the Kingdom, making it the President’s first state visit, and leading to reviving the historic Saudi-American partnership. It would be plausible to expect that Saudi foreign policy makers sought a formula that allows them to have strategic relations with both in a way that does not create distance from either. Trump’s attitude towards Russia was also helpful, as he does not in principle object to positive relations between his country and Russia, and actually considers it in the interest of the United States and world security. Moreover, Russia does not any longer consider that the Saudi-US partnership is a threat.

Energy is the key pillar of the Saudi Arabian-Russian relationship. And the since their first meeting during King Salman’s reign Russia agreed to build 16 nuclear reactors in the Kingdom and to negotiate oil production in order to control the falling oil prices. Despite many economic and political obstacles, the two countries managed to reach an agreement to restabilise the oil market. This is not the first time the two countries cooperated on oil, but the context is now different: America pulled back from the region, terrorism reached a peek, Iran has a nuclear deal with the West, chaos spread in many Arab countries in the aftermath of the uprisings of 2010 – 2011, and Turkey is seeking a regional role, all of which created a fundamentally different geopolitical situation. Today Saudi-Russian cooperation may start with energy but will not end there. 

The current state of Saudi-Russian relations was not an easy achievement and came counter to most expectations. RT considered it a shift from estrangement to potential prospects.  One year ago the National Interest ran a piece with the title “Russia and Saudi Arabia Are Headed for a Showdown” basing it on the impossibility of finding common ground between Riyadh and Moscow on terrorism, Syria and Iran.  Even after the first and successful visit of then deputy crown prince Mohammad bin Salman there were doubts. Sputnik at one point published a piece on Saudi efforts to undermine Russia. Saudi analysts were also warning from Russia especially after the Pravda ran a piece against Saudi Arabia. And even today there are those who reduce the relationship to oil or those who believe that this will be nothing more than a tactical step to gain concessions and compromises vis-à-vis Syria. 

Those negative expectations are based on concrete challenges facing Saudi-Russian relations, though some of the negative Saudi analysis is perhaps ideologically driven, as Islamists consider this relationship a threat to their position in the region. Those analysts, however, missed the fact that Saudi was set on overcoming all challenges, on developing a win-win relationship, and on seeking common grounds despite the existing differences of views. 

In Syria, Saudi had always insisted on the immediate departure of Bashar al-Assad, but more than that they were adamant on not allowing Syria to become a safe haven for extremists. Though the Saudis had openly criticised Russia’s position and intervention in Syria, they also saw the opportunities of a relationship with Russia and were aware of the common grounds that exist with Russia regarding Syria. After negotiations, the two sides agreed that the only real disagreement in Syria was on Assad, and they seem to have reached a middle ground: Russia accepting the eventual departure of Assad, and Saudi Arabia accepting a transitional period after which he steps down. 

On Iran, Saudi Arabia realises that Russia is not promoting a hegemonic role for Iran, and that the Russian-Iranian strategic partnership is based on the needs of both to manage the balance of power in the Caucasus and also due to the common US threat on both countries. In other words, the Russian-Iranian relationship does not pose a threat to Saudi Arabia. Nevertheless, the Saudis still prefer Russia to distance itself from Iran, but it seems that it can accept a middle ground which is to neutralise the regional effects of the Russian-Iranian relationship, while intensifying its security alliance with the US, to enhance its military capacity and develop its own arms industry, all for the purpose of deterring Iran and neutralising the effect of Russian armament of Iran. The Saudis went a step further and offered Russia a regional role in exchange of distancing itself from Iran (Assad), it also offered Russia a role with the Islamic Alliance and the Arab ‘NATO’.

On terrorism, the understanding and cooperation between both countries reached a point where Russia considered Saudi a key partner.

Saudi Arabia’s position is now much stronger regionally and internationally. It exhibited its capacity to mobilise Islamic countries for a common goal, created an Arab ‘NATO’, launched a centre to counter terrorism globally. Saudi Arabia also finalised its vision for a relationship with Russia, in a way that does not effect Saudi’s alliance with the US and enhances its strategic interests. It determined the points of agreement and disagreement with Russia, building on the former, resolving some of the latter, and resolving some points of disagreement. With that Saudi Arabia it was time for the two leaders to meet.

Russia and Saudi Arabia: 2015

In 2015, mutual delegations and international exchanges between Russia and Saudi Arabia exceeded those of all previous years in frequency and scope.

On February 11 and 12, 2015, an official delegation from Gazprom visited Riyadh, where negotiations with KSA Minister of Fuel and Mineral Resources Ali Ibrahim Al-Naimi were held. It was this event that anticipated a strategic turning point: the parties reached the decision to renew the work of joint intergovernmental commission on trade, economic, scientific, and technological collaboration that hadn’t worked for five years. On April 28, 2015, Russian Prime Minister Dmitry Medvedev signed an order appointing the Russia’s Minister of Energy Alexander Novak as head of the Russian part of the commission. 

Then everything happened at once. St. Petersburg became the site for a new, strategic, and groundbreaking conference, the International Economic Forum, which took place in June 2015. Riyadh sent quite an impressive delegation to the northern capital of Russia. Although Alexander Novak announced at a meeting that the next session of the intergovernmental commission had been scheduled for autumn, it was clear that, in St. Petersburg, the work had already begun.

Therefore, in June, the commission had already decided to create a project group to develop plans for joint activity on energy. At the time, as Novak explained, there were no particular projects assigned, but the agreement to create the working group between Russia’s Ministry of Energy and Saudi Arabia’s Ministry of Fuel and Mineral Resources included a directive to make progress. At the same time, as RIA Novosti reported, Saudi Arabia’s minister Ali Ibrahim Al-Naimi, said that the country was ready to invest in the Russian energy sector and was expecting “clear offers.” Moreover, the head of the Russian Ministry of Energy intrigued journalists when he discussed the future session of the intergovernmental commission: “Our colleagues from Saudi Arabia have brought a great deal of projects. They have already been presented to our companies. They are related to participation in building and reconstruction of railways and metro building.” In the near future, Saudi Arabia is planning to build subways in four cities.

Also at the St. Petersburg Forum, the head of the Russian part of the intergovernmental commission met with the head of the General Investment Committee of Saudi Arabia, Abd Al-Latyf Al-Usman. As a result, Russia and Saudi Arabia accelerated work on conducting business forums. “We will give investors the opportunity to work in both countries,” Al-Usman reported. Saudis intend to involve Russian investors in such areas of the economy as oil, chemistry, energy service, healthcare, transport, and information technology. And the Kingdom is ready to provide all necessary support.

Also in June, Russia and Saudi Arabia concluded an intergovernmental agreement to collaborate on the peaceful use of atomic energy. As RIA Novosti reported, Sergey Kirienko, head of the Rosatom Corporation, and his colleague Khashim Abdullah Yamani signed the document.

At the same time, the deputy head of Saudi Arabia NF, Admiral Ibrahim Nasir, who went to Russia to participate in the military-technical forum “Army-2015,” declared the Kingdom’s interest in acquiring Russian battleships and other arms and equipment. Simultaneously, KSA Minister of External Affairs Adel al-Jubeir, in exclusive interview to Russia Today, said that Riyadh was ready to purchase Russian arms. He also called the main purpose of the Crown Prince’s visit to Russia an aspiration to strengthen bilateral relations with Moscow.

The Russian Space Agency and the Saudi Arabic Center for Science and Technology (KACST) outlined new proposals for joint ventures in scientific studies and the use of outer space for peaceful purposes. The proposal document was signed by the head of Roskosmos, Igor Komarov, and KACST president, Prince Turki Saud bin Mohammed Al Saud, on June 18, 2015. The partners are planning joint projects in manned and unmanned space programs, cosmonaut preparation, launch capabilities, and the development of navigation satellites and systems. 

It is remarkable that Saudi Arabia became the first Arabic country to have a citizen taking part in a space project. Back in 1985, KSA was a partner with the United States. Now, a new turning point in space industry is possible. The parties made sure to create a working team with specialists who would work through the details of possible lines of cooperation in the field of space, including the creation of joint scientific and research manufacturing companies.

Now, let us back to Earth. Russia’s Mini-ster of Construction, Housing, and Utilities signed an agreement on joint projects in building, housing, and communal services with Saudi Arabia’s Ministry of Residential Building. While this venture is still new for the bilateral partners, and the projects must be discussed, the two countries’ partnership in agriculture is already working well. 

To continue to develop this cooperation, Russia’s Deputy Prime Minister Arkady Dvor­kovich announced to the Russia-24 channel that Russia was ready to increase grain supply to KSA. “If there is a demand, we’ll be ready to increase the supply,” said Dvorkovich. “Of course, we are not going to cross a threshold that jeopardizes our own food safety. If the crops, as we expect, account for up to one hundred million tons, the export of twenty-five to twenty-seven million tons is highly probable. In fact, Saudi Arabia may receive more than it did it before. After all, for our agricultural manufacturers, the Middle East markets are a top priority. We traditionally supply a lot of grain to countries like Egypt, Morocco, and Saudi Arabia. Now it’s clear that, in these countries, the demand is growing, and our exporting potential has grown, too. Therefore, we have the chance to increase supplies to Saudi Arabia and its neighboring countries.”

These plans were confirmed on June 18, 2015, on the margins of the St. Petersburg International Economic Forum (SPIEF) where the Prince Mohammad bin Salman and President Vladimir Putin led to one more significant undertaking. The Russian Fund of Direct Investments (RFDI) and the Sovereign Fund of the Kingdom of Saudi Arabia Public Investment Fund announced a new partnership. The parties will make mutual investments into attractive projects, including infrastructure and agriculture in Russia. According to the RFDI press service, the effort will cost about $10 billion. Saudi Arabia Public Investment Fund investments will become the most significant amount of foreign capital to the Russian Fund. 

But the achievements of Russian Fund do not end there. RFDI entered into partnership with another Sovereign Fund of the Kingdom, the Saudi Arabian General Investment Authority. The parties will conduct a joint search for new investment opportunities — and there are a lot of them. 

It is worth remembering that Saudi Arabia’s Public Investment Fund was founded by order of the King in 1991. The essential objective of the fund was to provide financial support to strategic industrial-commercial projects. The Saudi Arabia Public Investment Fund has already made investments in a number of strategic fields in the Kingdom’s economy, including oil-processing, oil chemistry, pipeline construction, oil storage, transport operations (including aircraft and marine transport), water desalination, mining operations, and infrastructure, among other strategic projects conducted by private investors.

 

Bilateral agreements between Russia and Saudi Arabia

  • The General agreement between the government of the Russian Federation and the government of the Kingdom of Saudi Arabia (November 20, 1994).

  • Protocol of bilateral consultations between the Ministry of Foreign Affairs of the Russian Federation and the Ministry of Foreign Affairs of the Kingdom of Saudi Arabia (March 29, 1999).

  • A Memorandum of understanding in the field of sports between the State Committee for Physical Training and Sports of the Russian Federation and the Directorate of youth Affairs of the KSA of the Kingdom of Saudi Arabia (September 2, 2003).

  • Convention between the government of the Russian Federation and the government of the Kingdom of Saudi Arabia for avoidance double taxation of incomes and capital (February 11, 2007).

  • Agreement between the government of the Russian Federation and2 the government of the Kingdom of Saudi Arabia on air transport (February 11, 2007).

  • A Memorandum of understanding on cooperation in the field of culture between the Federal Agency for culture and cinematography of the Russian Federation and the Ministry of culture and information of the KSA (February 11, 2007)

  • A Memorandum of understanding on cooperation in the field of standardization, metrology, and conformity assessment between Rosstandard and the Organization for Standards of the Kingdom of Saudi Arabia (July 6, 2011).

 

Russia’s trade turnover with Saudi Arabia

  • In 2016, Russia’s trade with Saudi Arabia amounted to 491 676 921 USD, a decrease from 46.91% (434 371 860 USD) in comparison with 2015.

  • Russia’s exports to Saudi Arabia in 2016 amounted to 350 914 657 USD, a decrease 54,47% (419 783 262 USD ) in comparison with 2015.

  • Russia’s imports from Saudi Arabia to 2016 amounted to 140 762 264 USD, a decrease of 9.39% (14 588 598 USD) in comparison with 2015.

  • Trade balance of Russia with Saudi Arabia in 2016 was positive in the amount of 210 152 393 USD. Compared to 2015, the positive balance decreased by 65.85% (405 194 664 USD).

  • The share of Saudi Arabia in foreign trade turnover of Russia in 2016 amounted to 0.1051% vs 0.1760% in 2015. Regarding the share in Russian trade turnover in 2016, Saudi Arabia took 75th place (in 2015 — 65th place).

  • The share of Saudi Arabia in exporting Russia to 2016 amounted to 0.1229% vs 0.2243% in 2015. Regarding the share in Russian exports in 2016 Saudi Arabia ranked 70th place (in 2015 — 55th).

  • The share of Saudi Arabia in the import of Russia in 2016 amounted to 0.0772% vs 0.0850% in 2015. Regarding the share in Russian import in 2016, Saudi Arabia took 75th place (in 2015 — 71th).

Based on the data of the Federal Customs Service of Russia

Moscow — Riyadh: 2017

Russia and Saudi Arabia want to bring the dialogue to a higher level, despite the strong and reliable relations between the two countries, said the Advisor to the Royal Court of Saudi Arabia, the General Director of the Center for Humanitarian Assistance on behalf of the King Salman Abdullah al-Rabiah at a press conference in Moscow...

...And there is good confirmation of it. From April 15 to 17, 2017 the Federation Council speaker Valentina Matvienko went to Saudi Arabia with the official visit. Matvienko had met with the leadership of the country, the Chairman and Members of the Advisory Council of the Kingdom. 

The main themes of negotiations were the peaceful settlement of Middle East conflicts, as well as issues of military-technical coope­ration and interaction in energy sphere and agriculture. 

According to Valentina Matvienko, the Russian Direct Investment Fund (RDIF) and the Public Investment Fund of Saudi Arabia will launch joint projects for the total sum of 3 bil­lion USD until the end of 2017: “the Funds have been successfully integrated. Because of them the projects worth about $600 million  have already been fully implemented.” The speaker assured that for its part the Federation Council will promote the removal of barriers for development of business contacts between the two countries. 

Let us recall that the partnership of the Russian Direct Investment Fund and the Public Investment Fund (PIF) for joint investment activities into the most attractive projects in Russia started in 2015. In addition, the RDIF signed an agreement with another public Fund of the Kingdom and the Saudi Arabian General Authority (SAGIA)

Valentina Ivanovna has also released a good news about the visit of the King of Saudi Arabia to Russia after being invited personally by the President Vladimir Putin. “Earlier, the President of the Russian Federation invited the King to pay an official visit to Russia. He said that he accepted the invitation with gratitude and plans to visit the Russian Federation... The King immediately gave all necessary instructions to his government officials to start preparing the content for the visit,” — RIA Novosti Agency quotes Matvienko. Let’s remember that in February of this year the President of Tatarstan Rustam Minnikhanov had a meeting with the Saudi King. He conveyed the warmest wishes from Vladimir Putin, as well as an invitation to visit Russia and Tatarstan Republic again.

But before that, in May 30, 2017, the Saudi Crown Prince, Mohammad bin Salman has also paid a visit to Moscow. What was it about? Likely, about the main issue. As was noted by Mohammad bin Salman at the meeting with Vladimir Putin, “we have no disagreements in relation to the Russia’s policy and the politics of Saudi Arabia... There are so many points of understanding between the two countries. As for those points on which we disagree, there is a clear mechanism to overcome them. We are moving with positive momentum and in a po­sitive way.” — And he also added: — “at present, relations between Saudi Arabia and Russia are experiencing one of the best stages.” 

“I am very confident that the first visit of the King of Saudi Arabia to Russia in history of our relations shall be a good sign, a good signal and good stimulus for further development of our interstate relations,” — said Vladimir Putin.

The specific points of the talks have been the price of oil, on which depends the world prosperity and markets, the issue of Middle East, and the Russian economy. Concerted actions of Russia and Saudi Arabia allow for stabilization of the situation on the world markets, noted the President of Russia in the course of the meeting.

Let’s recall that, just before the Prince’s visit to Moscow, OPEC and a number of other countries (including Russia) agreed to extend the agreement from January 1, 2017 on the oil production cuts until the end of the first quarter of 2018. As was noted by the Western experts, Riyadh helped Moscow to carry out the idea on the reduction of quotas, and the world’s media called this cooperation — the Oil Alliance. During the visit, the parties attempted to expand that Alliance. 

According to the Minister of Energy of Russia, Alexander Novak, the oil cooperation between the two countries can move on to a new level. “There are new prospects for bilateral cooperation, implementation of joint projects on extraction, transportation and processing of hydrocarbons on the territory of participating States and other countries, and technological cooperation,” — said the Minister. 

According to analysts of JP Morgan, the price of oil can rise above the level of $60 per barrel, if the validity of the Treaty of Vienna of the OPEC countries and other States on the reduction of oil production will be extended until the end of 2017. Compared to October 2016, oil production in the OPEC countries participating in the agreements on the reduction of oil production, declined by 1.13 million barrels per day. Thus, the cartel fulfilled the obligation by 97% (it has been 95% in the previous month). On average, the commitment of OPEC to this agreement during the five months of its validity is 96% 

“The growth of oil production in Libya and Nigeria, which are exempt from commitments to reduce production, had led to the increase in total oil production by OPEC in May to 290 thousand barrels per day, up from 32.08 million barrels per day — its highest level this year,” — as is stated in the expert report. But in annual terms, the mining of the alliance countries decreased by 65 thousand barrels per day.

On June 10, in Astana the Minister of Energy of the Russian Federation Alexander Novak held a meeting with his counterparts from Saudi Arabia and Kazakhstan, Khaled al-Va­lich and Kanat Bozumbayev, where the sides discussed the current situation. The Heads of the respective energy agencies confirmed their commitment to the agreement executed by OPEC and other States on the reduction of oil production (OPEC+).

In a broader format, the Ministers of the Gulf countries, including Qatar and Saudi Arabia, responsible for oil and basic industry, agreed to meet again in July 10 – 13 at Innoprom in Ekaterinburg. In the program published on the website of Innoprom, and namely in the list of participants for the first meeting in the format of “Russia — The Cooperation Council of the Arab States of the Persian Gulf” were also present the head of Minpromtorg Denis Manturov, Minister of Energy and industry of Qatar Mohammed bin Saleh Al-Sada, Minister of industry, trade and tourism of Bahrain Zayed Rashed al Zayani, Minister of Commerce and industry of Kuwait Khaled Nasser Abdullah Ar-Roudan, Minister of economy of the UAE Sultan Saeed al Mansouri, Minister of Commerce and industry of Oman, Ali bin Masoud al-Sunaidi, Minister of trade and investment of Saudi Arabia Majed bin Abdullah al-Kassabi, the Secretary General of the GCC Abdel al-Zayani.

On June 13, the President of the Russian Federation Vladimir Putin held a telephone conference with the King of Saudi Arabia, Salman bin Abdulaziz Al Saud. The heads of States exchanged views on the current situation in the Middle East and North Africa. The sides discussed topical issues of Russian-Saudi relations in various fields, leaders voiced their determination to intensify bilateral cooperation and the parties agreed to continue contacts on various levels.

Prospects for the straightening of Russian-Saudi economic cooperation are very broad, including in the economic sphere. Here is an extract from the latest news — there is an intention of the Sovereign Public Investment Fund of Saudi Arabia to enter into the development project of Tushino airfield in north-west of Moscow. 

Oil and Beyond

During his speech in May 2015 at the Conference on Climate Change in Paris, Saudi Arabia’s Minister of Fuel and Mineral Resources Ali Ibrahim Al-Naimi said something that may one day turn conventional ideas about the energy-supply market on their head. 

“Do you mean we should stop using hydrocarbons? Do you want me to come back home and close all the oil wells? Can we allow ourselves to do such things today?” asked the Minister, turning to the audience and then taking a thoughtful pause before continuing. “What will happen to oil prices, if I don’t supply ten million barrels per day to the market?” 

There are two conclusions from his speech. The first is that, in the near future, Riyadh (together with OPEC countries) does not intend to change its oil strategy. The price of oil is important to them but not as much as their share of exports on the global market. Russian energy policy stakes out a similar position on oil production and development. The statistics bear this out. The latest report of International Energy Agency showed that the scope of world oil production keeps on growing despite the significant drop in energy-supply prices. 

The second conclusion to be drawn from the Saudi Oil Minister’s speech is that, never­theless, the Kingdom is still considering the prospect of ending oil use, though not before 2040. In Al-Naimi’s opinion, according to Financial Times, the Kingdom will become “a global power in solar and wind energy” and will be able to export not fossil fuel but electric energy. At the same time, the Minister stressed that more than one billion people across the globe have no access to electricity and demand for oil will remain significant in upcoming years. 

Moreover, the Kingdom of Saudi Arabia is the largest oil consumer in the Middle East itself. More than 25 percent of oil produced go to the home market; that’s more than ten million barrels per day. In a Citigroup report, prepared in 2012, it was said that, if the home demand for hydrocarbons in Saudi Arabia continues to grow at its current pace, the country could turn from one of the largest exporters into a pure oil importer by 2030. 

So the oil question remains. But Russia and Saudi Arabia, as decided in June 2015, are going to create a working group to study the prospect of joint work in the field of energy. As the Russian Minister of Energy Alexander Novak said, Saudi Arabia has shown interest in working on energy projects in Russia, and Moscow has shown interest in working on projects in KSA. “We are aware that our commodity turnover is low, and we are going to develop it,” Novak said. It will be the main focus of the intergovernmental commission’s work. 

But investment cooperation between two countries could still be much better. That is, with the exception of the Lukoil project. That contract calls for exploring and developing Saudi hydrocarbon fields for a forty-year period and jointly creating Luksar with national petroleum company of Saudi Arabia, Saudi Aramco. General investments are more than $500 million. According to Lukoil information, the company’s activity in KSA began in March 2004, after they won the competitive contract to explore and develop fields in the Rub Al-Hali Desert, near Al-Havar. Lukoil was the first Russian company to receive access to mining in Saudi Arabia. 

In February 2007, the results of the exploratory work were in: Luksar announced the discovery of a hydrocarbon field with more than 100 million tons of standard fuel. Then came news about a gas-condensate field in Mushaib, with extracted supplies of more than 150 million tons of standard fuel. 

The Stroytransgaz company completed two projects: it built the Sheiba-Abkeik pipeline, at 217 kilometers in length, and it completed the water-supply system in Shukeik. Plus the equipment for gas fields in Haviya, Usmaniya, Shedgam, was supplied.

Russian companies such as Stroytransgaz, KAMAZ, RZHD, Volzhsky Diesel, Kaspersky Laboratory, Zakneftegazstroy-Prometey, Promstroygrup, Energostroy, Transneftegaz, and Tatneft have a great deal of working experience in Saudi Arabia.

However, it is not enough. Prospects for more bilateral collaboration may be connected to the establishment of contacts with both large and average businesses, including those companies from Russian regions with concentrated Muslim popula­tion. 

In addition, the Saudi Arabian economy is attractive not only for its oil and gas sector. Saudi authorities have provided the right conditions for diversification, construction development, trade, telecommunications, infrastructure, and the service sector. And Russian business could potentially compete for Saudi services.

So the economy is not only based on oil. As one Arabic proverb puts it: “We are quickly tired of anything we have in abundance.”

Road-Show:

Investing Capacities of Saudi Arabia

From 2005 to 2013 mutual trade between the two nations increased fivefold, exceeding $1 billion. In total, it is not so much. However, the rates are satisfactory. What’s more, finished products prevail over commodites in the mutual supplies. By Saudi estimations, the potential scope of Russian-Saudi trade is $8 billion to $10 billion.

KSA, based on its economic needs, may have a demand for Russian seawater-desalination technologies (in large volumes), as well as railway, metallurgic, and oil and gas chemical equipment from the Russian Federation, according to the Russian-Saudi Business Council. Exchanges of experience and knowledge in agricultural ground irrigation and in the extension of agricultural areas can also be useful for both parties. In general, Riyadh has extended the landscape of its external economic policy to include Russia.

Stated another way, Russia is among the countries Saudi Arabia sees as a strong investment partner. One way, Riyadh shows its interest by interacting with Russia on aqua-culture, fishing, and fish processing. This was proclaimed during the negotiations between Russian Ambassador Oleg Ozerov and the officials of KSA’s Agricultural Ministry. 

On May 25 to 30, 2015, in the business capital of Saudi Arabia, Jeddah, under the aegis of the Russian Chamber of Commerce and Industry, there was a Russian Roadshow. As the organizers of the meeting reported, the main point in the bilateral agenda was to gauge Saudis’ readiness to invest and to involve Russian businesses in KSA infrastructure development. The Kingdom has put up more than $500 billion. Meanwhile, eight industrial cities — as well as recreational zones, industrial zones, seaports, etc. — are being constructed with Saudi Arabia’s huge residential fund. Apart from producing, processing, and transporting oil and gas, perspective directions of collaboration include: railway construction; erection of heat and power plants with desalination equipment; mineral-deposit development, particularly phosphates, iron ore, lead, and zinc; agriculture; water supply and fishing; banking activity; tourism; health care; higher and secondary education; standardization and certification; and scientific and technological collaboration.

Saudi companies are very interested in collaborating with Russian companies on energy, railway construction, animal and fish breeding, veterinary methods, hydro-technical and irrigation construction, drop-irrigation systems maintenance, water-well drilling, health care, higher and secondary education, etc. Military-technical cooperation is also promising. 

Saudi businesses also pay attention to the Russian markets. Given the current initiative to support investments into Russian projects, Saudi Roadshow participants considered the following fields most promising: energy, machinery, infrastructure development, oil and gas service, tourism (including religious tourism), halal-industry, interbank collaboration, wood and hardware exports, and cooperation in the field of high-tech and education. 

According to information from the director of the Royal Initiative on Foreign Investments in Agriculture, Russia is among the high-priority countries for capital investments. The idea of this initiative is that Saudi investors, both state and private ones, invest in foreign cultivation of wheat, barley, rice, and soy, as well as in fish-processing and animal-breeding. The future supplies to Saudi Arabia will account for at least 50 percent of the product volume coming from Saudi investments. 

To develop this initiative, the Russian delegation was invited to see a presentation of agro-industrial-complex projects and allied industries in Saudi Arabia. The estimated total of Saudi investments in 2014 was $5 billion. This program is also dependent on the fact that Saudi Arabia is one of Russia’s largest grain importers. One principle highlighted at the forum: Saudi Arabia is attracted to reasonable prices and high-quality products. But instead of traditional imports, Riyadh decided to import grain and other agricultural products produced in Russia based on long-term Saudi investments.

The objectives are clear; the tasks are defined. In Russia, it is time to say the phrase: “Let’s start working, Comrades!” The partners in Saudi Arabia have the same enthu­siasm.

 

The procedure of establishing a business with the foreign capital in the KSA

The Kingdom of Saudi Arabia welcomes and encourages foreign investments. Large parts of the economy sectors are opened to foreign investors. However, there are some areas of business, operation in which is allowed only to businesses owned by the Saudis and, in some cases, to residents of member countries of the Cooperation Council for the Arab States of the Persian Gulf. These business sectors include exploration and production of oil; production and services related to defense and security; services related to the maintenance of the pilgrims; investments in real estate in some areas (such as Mecca and Medina); recruiting; intermediary services in the real estate market; publishing and printing sector and media; ground transportation; fisheries.

Foreign investments can be carried out mainly in two ways: a joint venture with a Saudi partner (with a minimum participation from the Saudis as a General rule doesn’t exist) and the company, fully owned by a foreign capital. Foreign investors are also allowed to purchase a property for business and private purposes but with certain restrictions. The government particularly encourages foreign direct investment in infrastructure, including energy, water, telecommunications and transport.

“The Act on foreign investment” adopted in 2000 requires any company with foreign participation, carrying out activity in the Kingdom, to have a special investment license. This license is issued by the Saudi Arabian General Investment Authority or SAGIA. That organization, in fact, operates as a “one window” service, carrying out a registration of business, and also allows visitors to pay required fees and provides consulting support.

To obtain the license one should meet the following requirements:

• Intended activities should not be included in the list of excluded activities, approved by the Supreme economic Council
of the KSA;

• Planned products must meet the requirements and standards of the KSA or of the European Union or the United States;

• Application for a license shall be made by a natural person arriving in the Kingdom to carry out investment activities or his representative;

• The investor must not have past cases of prosecution for a material breach of the provisions of the Act on foreign investments;

• The investor must not have in past cases of charges for financial and commercial violations in the Kingdom and beyond;

• The license must not violate the obligations of the Kingdom arising from the international agreements to which it is a party.

Licensing procedures and necessary documents for obtaining a license are contained in the so-called “The Investment guide” — a regularly updated document, which can be obtained in the office (business centre) of SAGIA or by visiting their website at: sagia.gov.sa.

The license shall be issued for a specific project, the parameters and cost of which should be disclosed in the applicant’s documents. There are requirements for the minimum investment amount for projects in various sectors of the economy. In particular, 25 million riyals $6.7 million USD) in agriculture, 1 million riyals (264.16 million USD) in the basic industry. These requirements apply to the total investment into the project, but in case of the Saudis being present as a partner, the foreign investors are able to participate in the project with a lesser amount. The investor can obtain two or more licenses for the establishment or participation in various enterprises. 

Primarily the investor can obtain only a temporary license for the period of 3 months. This document allows the investor to obtain a Saudi business visa and to receive his identification card (Ikama). 

Upon completion of the registration of the legal person in the established timeframe, he / she receives permanent license.

Company with foreign investments can be established in various legal forms. Several forms of legal entity for the implementation of foreign investment activities are applicable, such as: joint-stock limited liability company, joint stock company, general partnership, limited liability company, limited liability partnership or a joint venture. For the implementation of certain types of activities one may open a branch of a foreign company in the KSA. For some activities it is possible to establish an individual enterprise. “Investment guide” focuses on the first four forms listed above. In practice, the most popular organizational form for foreign investors is a joint stock company with limited liability. The minimum share capital for joint stock limited liability company with foreign participation is 500,000 Saudi riyals. Licensing of branches of foreign companies is carried out through SAGIA, and their registration by the Ministry of Industry and Trade. The minimum investment capital for a branch is 500,000 riyals (131 580 USD).

 

Russian Exports to Saudi Arabia

A large part of the Russian export to Saudi Arabia in 2016 (in 2015) consisted of deliveries of the following types of products:

  • Генеральное соглашение между правительством РФ и правительством Королевства Саудовская Аравия (20 ноября 1994 года).
  • Food products and agricultural raw materials (HS codes 01-24) — 70% of the total volume of Russia’s exports to Saudi Arabia(in 2015 — 75%);

  • Chemicals and plastics (HS 28-40) — 13% of the total volume of Russia’s exports to Saudi Arabia (in 2015— 6%);

  • Wood and pulp and paper products (HS 44-49) — 7% of the total volume of Russia’s exports to Saudi Arabia (in 2015 — 4.9%);

  • Metals and their products (HS codes 72-83) — 6% of the total volume of Russia’s exports to Saudi Arabia (in 2015 — 10%);

  • Machines, equipment and means of transport (HS 84-90) is equal to 1.45% of the total volume of Russia’s exports to Saudi Arabia (in 2015 — 0.96%);

  • Mineral products (HS 25-27) — 1% of the total volume of Russia’s exports to Saudi Arabia (in 2015 — 1%).

 

The largest increase in Russian export to Saudi Arabia in 2016 in comparison to 2015, had been detected in the following commodity groups:

  • Articles of iron or steel (HS code 73) — height 7 713 481 USD;

  • Fats and oils of animal or vegetable origin and their cleavage products; prepared edible fats; waxes of animal or vegetable origin (HS code 15) — 4 714 263 USD;

  • Cocoa and products thereof (TN VED code 18) — an increase of 2173 015 USD;

  • Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof (HS code 84) — an increase of 1 013 299 USD.

 

The greatest reduction of Russian export to Saudi Arabia in 2016 in comparison to 2015, had been detected in the following commodity groups:

  • Cereals (HS code 10) — a reduction of 339 057 107 USD;

  • Ferrous metals (HS code 72) and a decrease of 67 007 053 USD;

  • Paper and paperboard; articles of paper pulp, paper or paperboard (FEACN code 48) — a decrease of 6 863 565 USD;

  • Wood and articles of wood; wood charcoal (HS code 44) and a decrease of 6 404 066 USD;

  • Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes (HS code 27) and a decrease of 4 927 872 USD;

  • Rubber and articles thereof (HS code 40) — decrease by 3 500 528 USD;

  • Pharmaceutical products (HS code 30) — a reduction of 2 461 668 USD;

  • Glass and glassware (HS code 70) is decrease of 1 677 038 USD;

  • Miscellaneous chemical products (HS code 38) — decrease of 1 480 207 USD;

  • Tools and devices optical, photographic, cinematographic, measuring, checking, precision, medical or surgical; their parts and accessories (HS code 90) — decrease of 1 439 524 USD;

  • Means of land transport other than railway or tramway rolling stock, and parts and accessories (HS code 87) — decrease of 1 374 509 USD.

Based on the data of the Federal customs service of Russia

 

 

Priority Focus of Trade and Economic Cooperation 
Between Russia and Saudi Arabia:

Oil and Gas Industry:

  • Mining exploration
  • Processing and transportation of hydrocarbons
  • Environmental protection

Electric Energy

Trade, Economic, and Investment Collaboration:

  • Oil-chemical industry
  • Collaboration on quality-control in the market supply of products between the two countries to insure sanitary requirements and consumer safety.

Banking Activity

Mineral Resources and Metallurgic Industries

Agriculture, Water Supply, Animal-Breeding, Fishing:

  • Technologies for water-drilling, well restoration, water desalination, and repeated use of sewage systems
  • Conducting research into animal-breeding
  • Modern technology and applied studies in agriculture and animal-breeding
  • Organization of animal-breeding training and visits from professional delegations

Transport and construction:

  • Collaboration in municipal-economy services
  • TEA (technical and economical assessment) development for building sea-transport machines
  • Appointing high-skilled specialists, including seagoing personnel, to man the sea-transport and to provide assistance in their maintenance
  • Special training of seagoing personnel for Saudi shipping companies in Russian sea academies and training centers

Cooperation in the Tourism (including Religious Tourism)

Scientific and Technological Research

Use of Outer Space for Peaceful Purposes

Collaboration in Higher and Vocational Education:

  • Visit-exchanges between officials responsible for higher education, establishing cooperation between teaching personnel in fields of mutual interest
  • Collaboration in different scientific areas as a whole and in applied areas, in particular, between the two countries’ institutions of higher education and research centers
  • Exchange of information on standards for higher-education diplomas
  • Information exchanges and participation in workshops, meetings, and conferences on scientific subjects in Russia and Saudi Arabia
  • Exchanges of scientific periodicals, academic articles, and research results
  • Exchange programs for bachelor’s degree students and high school students in medicine, health care, and other specializations.

Cooperation in Health Care (in particular, Radiation Protection)

Collaboration in Sports

Reference: According to information from the Russian-Saudi Intergovernmental Commission on Trade, Economy, Scientific and Technical Cooperation

 

Walking Through a Minefield

Saudi Arabia and Russia: A Bulwark against Terrorism

Saudi Arabia has experienced varying levels of violence and terrorism perpetrated by radical Saudis. They have left deep scars in the country. Since the 2003 residential compound bombings in Riyadh, authorities have taken a new, decisive approach, seeking to address the range of contemporary challenges in the field of countering armed terrorism.

A decade after the terrorist attacks in Riyadh, a new vocabulary of moderation has been introduced to the country. The kingdom is between on a transformative, modernizing project — both a political choice and a practical necessity for survival. Saudi Arabia’s new approach has been welcomed internationally. 

The Global Center for Combating Extremism — or “I’tidal,” which translates to “mo­deration” — came to life in the context of this historical trajectory. Two years after the attacks of September 11, the world had awoken to a new challenge. The late King Abdullah believed terrorism was a “long and complex international security threat the world needs to confront.” 

Alongside the Ministry of Defense’s Ideological War Center, “I’tidal” aspires to lead the global Initiative of countering terrorism and extremism to new heights. Inside Saudi Arabia, preemptive strikes against terrorist groups were spearheaded by former Interior Minister Prince Mohammed bin Nayef — who was one attacked in his own home by an Al-Qaeda in the Arab Peninsula militant.

The Center’s organizers assert that they are capable of deterring radicalization. Secretary General Nassir Al Baqmi confirmed that the components of the center’s success lie in its sophisticated technology in the field of countering radical thoughts and related activities on social media websites, the Internet, and general media. 

The Center is undertaking the task of countering terrorism using advanced media and di­gital methods — cutting-edge technology that monitors, processes, and analyzes extremist narratives with high accuracy. This new scientific approach, to be used during all stages of the process and analysis, will help to deliver high-quality results unprecedented in the annals of cyber counter-extremism.  

According to reports by international surveying centers, nearly four million violent tweets fill the cybersphere via Twitter each day. Thousands of accounts spread vile ideas against the ideals of peace, coexistence, and the value of human life which the world has been struggling to maintain. 

The Kingdom of Saudi Arabia understands that there is a missing link in the reading and comprehension of terrorism, in light of the recruitment of several of its own youth by terror groups. The country has decided to monitor sermons and clerics who have informed the ideological worldview of these young people.

To reinforce the Interior Minister’s efforts to rehabilitate former terrorists, a decision was made to go after the catalysts of deviant thought that have driven many toward extremism. A new center for ideological warfare has been established and supervised directly by the Defense Ministry to assist I’tedal in combating ideological terror by exposing its narratives and rhetoric. Another aim is to foster a culture of “prevention” of terrorism — that culture that drives people to snap selfies with beheaded victims.

In the same context, “the Ideological War Center,” spearheaded by Crown Prince Mohammad bin Salman, targets the roots of extremism, and aims to strengthen moderation and reclaim the spirit of Islam that has been hijacked by extremists. By dedicating studies and research of radicalism and the means of ideological persuasion, it will be possible to lay a groundwork for blocking the distortion of religion by merchants of death and des­truction.  

Of course, winning the war on terrorism and extremism is ultimately an art and not a science. Several mistakes have occurred, and some aspirations did not translate into action. But Saudi Arabia has recently witnessed unprecedented action and mobilization in this realm. His Majesty’s recent visit to Russia reflects the change in Saudi Arabia toward a future that unites all global powers in the common fight against terrorism.  

Countering terrorism is of the highest strategic priority in all nation-states’ struggle for security. It is no longer merely a national or domestic challenge. Terrorism has become a tool used by nefarious trans-state actors to dominate regions and pressure the foreign policies of superpowers. ISIS altered geographical realities on the ground — and terrorists aspire to outdo the organization in expansionism.  

The attacks on Saudi Arabian soil in 2003 were the turning point that motivated the desire to initiate ideological combat alongside security measures. The leadership understood that it would be difficult to tackle terrorism milita­rily without a broader, holistic approach. Does Al Qaeda have branches in Saudi Arabia? Does it have deep sleeper cells? The security apparatus found its answers, and moved from a reactive strategy to a bold campaign of preemptive strikes to choke off terrorism in the country. 

Today, the war against the many shades of evil is an existential war for Saudis. Citizens are aware that their country has always been, for terrorists, the most prized territory on earth — back when it was still an nascent emirate in Dir’ea, and long after it had morphed into a regional power.

The new Saudi Arabia aspires to become a fulcrum of the global economy — an axis of international trade, commerce, and investment. Thus stability is Saudi Arabia’s strategic choice. There have been missteps in the past — but the Kingdom, like its palm trees, stands tall in confronting the challenges of the present and future. 

NATO in Arabic

Washington and Riyadh sign defense contracts for the $ 110 billion.

During the ceremony in Riyadh with the participation of the US President Donald Trump and Secretary of State Rex Tillerson have been signed the Defense Contracts for a dazzling sum. Over the next 10 years, the total sales could reach $350 billion. Thus, Trump takes down all Saudis’ military restrictions: shipments of arms had previously been suspended by the Obama administration. According to American officials, this deal will provide for a deep modernization of the army and Navy of Saudi Arabia, straightening the production with some assembling facilities for weapons directly on the spot.

Many observers wondered: what exactly will Saudi Arabia do with that arms? For comparison, $350 billion — that’s seven annual defense budgets of Russia. According to the White House, these contracts greatly expand the cooperation between the US and Saudi Arabia in the field of security and contribute to stability. “They will also enhance the Kingdom’s participation in anti-terrorist operations throughout the region, reducing the US burden of these operations, which currently are the US military responsibility,” — said the employee of the US Administration. As was stated, the Contracts “support a development of a long-term security of Saudi Arabia and the Persian Gulf region in the face of threats coming from Iran.” In addition, according to the White House, they will help to create tens of thousands of jobs in the United States.

This is supported by statistics: Saudi Arabia is in third place in the world in military expenditures after the United States and China. Finally, the example of Riyadh — science for the European partners of the United States. At the meeting of defense Ministers of the NATO countries, the Pentagon Head James Mattis warned that Washington will limit its obligations to the Alliance, if member-states will not increase spending to 2%. And the recent visit of Trump to Riyadh showed what sums of money should play in this business. In short, now the European allies of the US know to whom they have to measure up to, and now Trump will also have an easier time enforcing financial obligations in Brussels.

There is another interesting detail. As stated in an interview of NATO Secretary General Jens Stoltenberg to the German newspaper Bild, the Alliance does not intend to participate in fighting in Syria and Iraq. Perhaps the Secretary General hurried: Donald Trump may not like this position, considering he plans to restore American dominance in the Middle East. But is that really a military plan or something else? It is entirely possible that the businessman Mr. Trump is lead to a greater extent by his “hydrocarbon” interest. Many observers commented on his statement at the Arab Regional Summit in Riyadh on the start of the implementation of the new Middle East US concept, that is, the formation of an “Arab NATO.” Black gold, after all, needs a reliable protection. 

We must assume that the new Alliance will be headed by Saudi Arabia with the support of the United Arab Emirates, Egypt and Jordan. The project also aims to become a counterweight to the growing activity of China. 

As well as NATO — the new Arab Alliance will get its own Charter and a permanent military contingent on its lend, which will consist of the armed forces of the Member States. The task of managing the Alliance will fall to the Council of Defense Ministers of its member States, with rotating chairmanship.

The national security adviser, General Herbert McMaster has formulated Trump’s main task as follows: “He will help our Arab and Islamic partners to take decisive new steps to promote peace and confront threats coming from ISIS, al-Qaeda (both radical organizations are banned in Russia), Iran and the Assad regime that spread chaos and violence bringing more and more suffering to the Muslim world and beyond”. 

The idea of an “Arab NATO” has been pending in the American military-political offices for several years. The necessity of establishing a Middle East Military Alliance have deteriorated to the extent that, as the European Alliance lost — mostly material — interest in American wars. Trump reasoned differently: the America comes first, including in the Middle East. Trump has his own vision of American leadership in the region, to shift the financial burden of military actions on allies and to provide jobs for the United States citizens, while creating more business deals for the military-industrial complex — that, in fact, is the main American national interest.

As for Saudi Arabia, and its interests — primarily economic — it is also quite consistent: the creation of a powerful military-industrial production promises to become a new engine of economic growth. 

A Kingdom Full of Youth

Saudis have a young Crown Prince — only 31 years of age — who has loomed large in the Arab world for the past two years.

With the appointment of Crown Prin­ce Mohammad bin Salman, vertical transition — the transfer of power from father to son — has been restored in Saudi Arabia, granting the kingdom vitality and stability. Most monarchs across the world follow this trend, mostly due to the fact that horizontal transition — that is, from brother to brother — has a tendency to sow instability and cause friction within the ruling family. For over a century, transition of power in Saudi Arabia has been an affair among the offspring of the kingdom’s founding father, King Abdul Aziz Al Saud — until Mohammad bin Salman dramatically, yet peacefully and consensually, broke the streak. The shift was welcomed by senior princes who work to safeguard the continuity of the ruling system. 

It is fitting that a young person be groomed to take the helm in a country in which 65 percent of the population is under the age of 29. Policies the young prince has championed reflect the sensibilities and aspirations of the country’s youthful majority. Saudi youth tend to be more open-minded toward contemporary global norms. They also respect contemporary approaches to governance — such as the use of performance indicators, a mainstay of Mohammad bin Salman’s “Vision 2030.” 

Before Prince Mohammad bin Salman became heir apparent, a question was often posed: What happens to the regime when the founding father’s offspring all pass away? This question no longer bears the same importance, as the entire structure of the ruling authority has changed. Now the Prince will do his utmost to safeguard the third historical epoch in modern Saudi history, and populate government with new talent. 

A young government in partnership with its young society can develop programs, strategies, and results that achieve prosperity. King Salman’s first cabinet in 2015 brought numerous young voices into the upper echelons of government for the first time. The Crown Prince, for his part, understands that Saudi Arabia’s youth bulge, today a source of promise and potential, will one day pose a great challenge. In 30 years, a vast swath of the population will reach retirement age all at once and require social security and added health care. 

The smooth transition of succession to Mohammad bin Salman should also provide assurance that a steady hand is co-navigating the region’s political and economic volatility. 

Iran’s government of clerics has meanwhile been betting on the probability of a palace coup if King Salman were to appoint his son Crown Price. Now it has lost that bet. The transition was rendered smooth not only by the consensus and legitimacy offered by the Allegiance Council and senior clergy, but also with the blessing of the people. It was also enhanced by the trust and goodwill Prince Mohammad bin Salman has accrued over the past two years as a new strategy was quickly forming. He won points for granting greater authority to younger figures, and for the popularity of changes to the cabinet and leadership positions in the areas where he achieved a steering role.

Over the past two years, as the Prince began to mobilize government to implement new policies, he revealed aspects of the model of administration he prefers. As noted above, he has implemented performance indicator techniques to measure outcomes. He holds his deputies accountable, and implements swift personnel changes according to their performance. In doing so, he sends a clear message to officials: Their only job security lies in delivering results for the population. His ministers have therefore been compelled to work harder. Each strives to impress. The energy in the cabinet manifests through the bold ideas that arise from their deliberations. 

A further dimension of the Prince’s political realism and strategic decisiveness manifests in the way he has managed various foreign files, notably with respect to Qatar and Yemen. The leadership in Doha has posed successive political dilemmas to Saudi Arabia which have been accumulating for years. Prince Mohammad bin Salman has formulated a clearcut position that it is no longer acceptable to sweep these matters under the rug. To outside observers, Saudi Arabia’s bold moves vis a vis Qatar may appear out of character. Saudi Arabia has long taken a conciliatory approach in its relationship with all its Arab neighbors, in particular the Gulf. In any conflict, it has always been the first to deescalate. But Qatar’s crescendoing antagonism to Saudi Arabia has become an obstacle to the latter’s vision to confront terrorism in the region. The Prince chose to turn the tables and set a new precedent in intra-GCC policy. In doing so, he has confused Qatari calculations. 

In the economic realm, the Prince has for­ged a new doctrine, built on the best practices for modern economic development that have been tested and honed in numerous countries. He has stopped the bleeding of the national wealth, so common in patriarchal systems of authority. Within the coming years, government institutions are expected to develop into platforms sustained through taxes that are recycled into services. The Crown Prince understands that in order to normalize the practice of taxation in Saudi Arabia, a cultural process is in order to wean a spoiled society off its feeling of entitlement. It will begin with taxes on luxury items, particularly those that are also health hazards, namely cigarettes. The Prince’s ministers will be studying the psychological impact of the evolving tax regime and tweaking the rollout as required.

The international community has come to accept Prince Mohammad bin Salman and his visions as compatible with positive reforms in the region and a peaceful international order. In launching the “Islamic Coalition Against Terrorism,” he made it clear to the international community that he wants Saudi Arabia to be a principal actor in combating political doctrines that use religious slogans. These groups, in his view, have harmed the perception of Islam and Muslims. After U.S. President Donald Trump visited Riyadh in May, he said that the Saudis have serious plans to eradicate the roots of terrorism. The economic cost of this coalition will be high, but the young prince believes that Saudi Arabia bears responsibility to forge Muslim unity in toleran­ce, and end the dynamic that has caused Westerners to associate Islam with terrorism.

In sum, decisive economic and tax reform, and decisive management of the Saudi cabinet all speak to the prince’s determination to achieve reform. The Prince realizes that there is much to change in his country. He must revitalize the society and open the public discussion to diverse voices. In establishing a government committee to develop entertainment in the kingdom, he will end the sucking of billions of Saudi riyals out of the country and into the tourist havens of Dubai and Bahrain. A hallmark of success will be the opening of movie theaters in Saudi Arabia. Meanwhile, many Saudis hope and expect that the Crown Prince will review all the country’s most pressing social issues through a progressive lens — beginning with the cause of women’s rights. Ending the ban on women driving will of course be a welcome step.

Falcons of Big Football

The FIFA Confederations Cup is over in Russia. Few people know that the origins of this event belongs with Saudi Arabia and namely with the King Fahd Abdul Aziz Al Saud.

In Russia, the FIFA Confederations Cup was held for the first time. According to the established procedure the country hosting the tournament is the same one that hosts the World Cup the next year. Now it’s a kind of rehearsal before the main fight. The current competition was attended by Russia (hosts), Germany (winner of the 2014 world Cup), Australia (the Asian Cup Champion ), Chile (the America’s Cup Champion), Mexico (CONCACAF Gold Cup Champion), Portugal (European champion), New Zealand (the OFC Nations Cup Champion) and Cameroon (the African Cup of Nations Champion). Countries like Chile and Russia — are the tournament debutants. The teams in total played 16 matches in the four hosting cities: Sochi, Kazan, St.-Petersburg and Moscow. 

On how well the teams played, and most importantly how Russia is ready for the upcoming World Cup 2018 will judge the experts from the world of sport and soccer “administration”. But this is definitely the right time to remember the origins of the tournament. 

The FIFA Confederations Cup is quite interesting and unusual event. Its year of birth — 1992. Location — Riyadh, Saudi Arabia. Its founding father is a big fan of soccer (football) — king Fahd bin Abdul Aziz Al Saud. The head of the Kingdom decided on a bold act of football regional integration and invited to his country the Champions of the three confederations: Africa, Central, North and South America. As the result Argentina, the United States, Côte d’Ivoire and Saudi Arabia played for the first trophy. Argentine national team won the first place. Saudi Arabia took the second, and the U.S. team was the third. It was then, the concept of “Tournament of Champions” first introduced into the sport lexicon. 

A lot of emotions of the fans and the energy of the players have leaked since that time, but the tone to the new style of the football world was set in 1992. The movement has grown, the membership has changed (currently, there are 8 teams). The Cup itself came under the wing of the International Football Federation, but from a sporting point of view, at its core, this event remains a competition that unites the Champions. Plus, of course, the hosts of the tournament. 

Despite the quite large number of major participants, the FIFA Confederations Cup has been very often called a “test” competition. This is due primarily to the fact that its main advantage, from the point of view of the hosting country, is the ability to test in combat the stadiums, hotels and other infrastructure, as well as to draw conclusions and to prepare themselves for the World Cup. But not everything is about being pragmatic. The Confederations Cup since its birth has been a testing ground for all sorts of brave ideas: from automatic system of goal detection and ending with video replays. In relation to the games in Moscow, Saint-Petersburg, Kazan and Sochi, this meant that the arbitrators can review the contentious issues while their assistants now are able to make suggestions if the referee missed something out of sight.

A football tradition remained just as strong in Saudi Arabia itself. The second Confederation Cup took place in the Kingdom in 1995. The tournament was attended by six teams (Nigeria, Japan, Saudi Arabia, Denmark, Mexico, Argentina). The strongest was Denmark. Argentina became the second national team while Mexico took the third place. In 1997, the KSA once again hosted the Confederations Cup. This time the teams from South Africa, Australia, Saudi Arabia, United Arab Emirates, Czech Republic, Mexico, Brazil and Uruguay met on the field. The winner was Brazil. However, it didn’t upset the hosting state or organizers of the tournament. In 2015, right after being crowned, the King Salman bin Abdulaziz  Al Saud by one of his first decrees ordered to provide financial assistance to football clubs of the Super league of the championship of Saudi Arabia. 

 There are three teams that have a leading role in the Kingdom — al-Hilal, al-Ittihad, al-Shabab. Basically, only the best players are selected to play for them. Fans of the national team players are called falcons. And sometimes — 
Asian Brazilians. They still have to achieve the same success in the world tournaments as that of their Brazilian colleagues. But is this really all that important? What is important is a commitment to the idea. For example, a long-term goalkeeper of the KSA team Mohamed al-Deaya, according to FIFA, ranked second in the number of matches played for the national team among all players of all coun­tries — 178! 

In fact, the tournament which is currently entitled the Confederations Cup has been renamed in 1997, just after the third competition in Saudi Arabia. Since that time, its format has been unchanged: the six winners of the continental Championships, world champion and the hosting country will always start with a group stage, followed by two semifinals and matches for the third and first places.

The trophy of the FIFA Confederations Cup is made of gilded bronze with the base made of lapis lazuli and black ebony. It weighs 8.6 kg, with the height — 40 cm, also has a depiction of the six continents, representatives of which participate in this FIFA tournament.

A Tradition of Affinity:

The Foundations for Saudi-Russian Cultural Exchange

It is a fortuitous time for any foreign power to think creatively about cultural exchange programs with Saudi Arabia — because the kingdom has committed itself to opening up to the world’s cultures, and to cultural and entertainment collaborations with other countries. Saudi Arabia Vision 2030 states:

“We consider culture and entertainment indispensable to our quality of life. We are well aware that the cultural and entertainment opportunities currently available do not reflect the rising aspirations of our citizens and residents … It is why we will support the efforts of regions, governorates, non-profit and private sectors to organize cultural events. We intend to … attract local and international investors, creating partnerships with international entertainment corporations.… We will seek to offer a variety of cultural venues — such as libraries, arts and museums — as well as entertainment possibilities to suit tastes and preferences.” 

Cultural and intellectual elites in Saudi Arabia have long lamented restrictions on entertainment and cultural diversity within the kingdom. So for them, the new government policy is welcome. But as the floodgates open to foreign cultural exports, some worry about the nature of the cultural interplay with the outside world that will follow. Will Saudis consume only the most base and superficial of the world’s heritage and legacies, or will they be enriched by high culture as well? Will they simply consume the culture of others, or will they find genuine partners for a cultural exchange, such that they begin to contribute to global culture in their own right? And in Saudi Arabia’s traditionally oriented, deeply religious society, how will the interplay of culture and religion influence the nature of the exchange?

Saudi Arabia’s developing relationship with Russia provides an important testing ground to begin to answer these questions. And Russian cultural figures — whether working in tandem with their country’s official or semi-official cultural institutions or in operating independently — will have an opportunity to gauge the kingdom’s openness for themselves. All signs point to a rare and historic opportunity for Russians and Saudis to become better acquainted with each other — their heritage, their sensibilities, their outlook on the world. If thoughtfully and deftly planned, a concerted program of cultural engagement between Russia and Saudi Arabia can not only augment the growing bilateral relationship between the two governments and the two economies, but also forge a lasting emotional bond between the two peoples. 

 

Mutual Saudi-Russian Affinity

The grounds for optimism begin with the observation that there is already pent-up demand in Saudi Arabia for greater access to the living legacy of Russian culture and heritage. In April 2013, it came to the attention of Russian media that 700 girls were studying ballet in Saudi Arabia — but by the English method only. 

Affinity for Russian culture is not solely spontaneous; it is also the result of a proactive effort by some Saudi academic institutions to instill a greater interest in Russia among young people. One bastion of interest is the Russian language section of the Department of Translation at King Saud University. In March 2015, according to Saudi press reports, the department held a “Day of Russian Culture.” It featured an exhibition of photos on the cities of Russia, its cuisine, its sports teams, the country’s achievements in space exploration, and even an exhibition of Russian folklore. A special quiz game called “We Know and Love Russia” was organized for Saudi students to take part.

The Saudi public discussion has also featured voices averring a natural affinity between the respective cultural heritages of Saudi Arabia and Russia. The beauty of Pushkin, for example, was described in the February 2012 edition of Aramco World, the longstanding Saudi cultural magazine, published by the world’s largest company. The article likens Pushkin’s seminal 1824 poem “The Fountain of Bakhchisaray” to “a kind of Russian One Thousand and One Nights: a 3500-word verse that recreates the world of the palace’s builders, the vanished Crimean Khanate.” The article draws the connection between the “Fountain” and the 1001 Nights as follows: “a love between a soulful conqueror and a captive maid, doomed by a vengeful harem queen.” The article also notes with some wonderment how deeply Russians feel attached to the poem: “So deeply does this poem resonate that still today, moved largely by Pushkin, some 250,000 people a year come from all over Russia to the palace, primarily to set eyes on the poem’s set-piece—the actual Fountain of Tears, which Pushkin turned into one of the most profound symbols of eternal love in all of literature.”

Where does this visceral feeling of connection to Russian literature come from? Chris Cryer, an American professor who worked at King Saud University in Saudi Arabia in the 1980s, gives her own answer to the question in her memoir, Tolstoy in Riyadh. She traces a parallel between the romantic sentimentality of Russian culture and Saudis’ deep attachment to their own values and traditions in the face of change. “Tolstoy would have found much to admire and enjoy in Saudi Arabia,” she wrote. At a time of great flux in the kingdom, this passion to preserve and honor the past is sure to remain strong.

Saudis’ natural affinity for Russia and its cultural legacy may find an echo in the depths of Russians’ own feeling of connectivity to the Arab world. In his book Russian Orientalism, Canadian scholar David Schimmelpenninck van Der Oye finds that in the nineteenth century, “the Russian Empire’s bi-continental geography, its ambivalent relationship with the rest of Europe, and the complicated nature of its encounter with Asia have all resulted in a variegated and often surprisingly sympathetic understanding of the East among its people.” The author recalls that in 1893, the Russian Baron Viktor Romanovich Rosen, having become dean of St Petersburg’s Faculty of Oriental Languages, began to build an “entire new school of orientology.” It laid the groundwork for a study of the Orient that combined the best traditions of scholarly detachment on the one hand with a deep sense of empathy and identification with Middle Eastern peoples on the other. In Saudi Arabia today, the writings of Western Orientalist scholars from the same period are known and available — but the Russian intellectual legacy is more obscure. This is a problem that needs to be addressed.

However esoteric the literary legacies of Ro­sen and his peers may be, however, there can be no doubting the passion and affinity for the East which Nikolai Rimsky-Korsakov conveyed in Scheherazade, the orchestral masterpiece, known and loved across the Arab world.

In short, there is a firm foundation of mutual affinity and appreciation to build on. 

 

Horizons for Cultural Exchange

The kingdom’s officials have already made several concrete statements about the cultural and entertainment dimensions of Vision 2030. For example, Prince Mohammad bin Salman has stated that part of the Vision is an aspiration to see Saudi Arabia open cinemas and a grand opera house. Ahmed Al-Khatib, chairman of the General Entertainment Authority in the kingdom, has noted that the population overwhelmingly supports this aspiration. As part of the effort to realize the “Vision,” the kingdom has committed to building an “entertainment city” outside Riyadh. Plans call for a “Six Flags” theme park, golf courses, and car racing tracks. In February 2017, a massive comic book convention, Comic Con, was held in Riyadh. In March, Saudi Arabia held its first open concert in Riyadh, featuring seminal Saudi vocalist Muhammad Abduh. This mixed bag of outcomes reflects the fact that the cultural component of the “Vision” is still a “work in progress,” open to and in need of input. 

In proposing cultural programs to Saudi Arabia, Russians will find that the initiatives that win a receptive ear are those that balance Saudis’ reverence for tradition on the one hand with their yearning for renewal and progress on the other. Russians who wish to engage Saudis culturally should ask themselves, what aspects of Russians’ heritage, ideals, and achievements can provide the greatest hope for a society in transition? At the same time, they should also ask how to kindle the interest of a large segment of Russian society in the culture and traditions of the people of the Arabian Peninsula. In finding answers to these key questions, Russians will find ample opportunity to share pride in their own traditions with Saudis. And in forging genuine cultural affinity, they can build a solid emotional foundation for the forging of a common destiny. 

Kingdom of High Culture

Russia isn’t the only country that celebrates Teacher’s Day every autumn. According to Arab News, last October Saudi Arabia’s Ministry of Education announced an award for the Kingdom’s most distinguished teachers for their diligence and hard work. The awards are generous: luxury cars and checks from 10,000 to 120,000 Saudi riyals (about $2,500 and $32,000 thousand, respectively). Among the applicants are school teachers, tutors, and headmasters, as well as the best students. “This confirms responsible attitude of the Ministry to education in general. These awards should become a great incentive for people working in this area,” says one authoritative source. 

Saudi businesses also intend to contribute to the expansion of a liberal arts education system. “We are ready to invest in opening Russian schools in our country,” said Usama Al-Kudri, a member of Saudi Arabia’s government Advisory Council, at the international exhibition Innoprom, which took place in Ekaterinburg. “Currently, Russian schools in the countries of the Arabic world can be counted on your fingers. This direction must be developed,” said Al-Kudri, according to the TASS Agency. In his opinion, opening Russian schools may help to attract Russian investors to the Middle East and Africa, as well as establish collaboration in the field of education between Russia and countries of the Arabic world.

It’s a pragmatic approach, right? The Kingdom of Saudi Arabia uses this strategy for everything, including culture, science, education, art, and even sports development.

 

High Technology and Cultural Identity 

As the Custodian of the Two Holy Mosques, King Abdallah of Saudi Arabia said the Kingdom, from the very moment of its foundation, was determined to acquire the latest in scientific findings and technologies across fields, while at the same time keeping its commitment to Islam and Arabic cultural identity. The country does a great job using the Arabic language in modern mass media, which does not prevent achievements or scientific progress from developing. In his message to the second International Symposium on Computer Technologies and Arabic Language, which took place in Riyadh at the end of 2009, the King said: “We understand that language is not only a repository of nations’ cultural memory, but it also must serve for the welfare of spreading modern science, extending its vocabulary, perfecting, developing, thinking, and comprising new concepts. However, today, there is an opportunity to take advantage of computer technologies to enhance the Arabic language.” The King highly touted an initiative to develop Arabic content for the Internet, indicating that projects in this field strengthen the role of the Kingdom in keeping its Arabic and Islamic identity, on the one hand, while contributing to progress on computer technologies, which spread scientific knowledge in the Arabic community, on the other hand.

Saudi Arabia is the spiritual center of Islam. At the same time, the Kingdom keeps up to date in the high-tech age. 

There are but a few examples below. At the end of 2009, rusarabbc.com announced the opening of the Geometric Modeling and Scientific Visualization Research Center. The center is the largest research 3D complex in the region and is based at the University of Science and Technology of King Abdallah. The project was designed by Arabic specialists, jointly with specialists from the University of California in San-Diego. Simultaneously, Saudi Arabia opened its first university where men and women study together. More than 3,000 high-ranking guests visited the opening of the University of Science and Technology, including the presidents of Sudan and Turkey, the King of Jordan, and other Middle East leaders. 

The first in the Middle East Three-Step Electronic School was opened in Mecca. The school was named after its founder and sponsor, businessman Abdurakhman Fakikh. According to emirates.su, the modern complex is fully equipped with computers and classrooms for studying design, computer science, photography, car repair, gymnasiums, stadiums, etc. The student campus is located “in the garden with fountains.”

At the same time, from 2000 to 2010, the country’s authorities decided to put aside $400 billion for innovation. Islam has never been against science and progress, and Muslim culture has made a significant contribution to the development of all mankind. 

Foreign partners were not kept waiting for long. Synopsys, the world leader in software development, IP for design, and production of semiconducting goods, and the City of Science and Technology in Saudi Arabia (KACST) didn’t hesitate to sign a memorandum of understanding to create a center of nanotechnology design at KACST. The aim of this collaboration is to support the development of nanotechnology ecosystems in Saudi Arabia.

The B.I. Stepanov Institute of Physics at the National Science Academy of Belorussia signed contracts with the Nanotechnology Center of King Abdulaziz. The goal is to develop several modern laser equipment models for their colleagues in Saudi Arabia — such as sophisticated tweezers or laser pincers designed for manipulating microscopic objects via laser light. These devices are highly relevant to microbiology, physics, chemistry, genetics, and cytology. They are also considered to be among the most innovative tools for capturing and relocating live cells, DNA molecules, and chromo­somes. 

The list of Saudi Arabia’s achievements in education, as well as the list of contracts and agreements with foreign partners in high-tech, goes on. Probably, Ukraine is the only country Saudi Arabia can’t get along with. As Riyadh newspaper reported (it was quoted at the ria.ru website), the Kingdom refused to recognize the diplomas of Ukrainian medical-education institutions. According to Riyadh, the order of the council at Saudi Arabia’s Healthсare Ministry declares that doctors with Ukrainian diplomas may only practice medicine in the Kingdom if they have attended special extension courses. But this is only the exception that confirms the rule: Saudi Arabia respects quality. Also: Saudi Arabia’s healthcare system is free. The government invests more than 8 percent of the national budget into healthcare. And medical service in the Kingdom has achieved an extremely high level over the last decade. 

 

Art of Living 

Let’s get back to the culture, in its traditional sense.

Experts admit that classical literary traditions have not been developed in the country in comparison with Mediterranean Arabic countries. The best-known Saudi writers are late-nineteenth-century historians; the most renowned is Othman ibn Bishr. But the lack of literary classics is filled by the deep-rooted traditions of verbal poetry and prose, which date back to pre-Islamic times.

The country has a developed system of literary clubs and libraries. Saudi literature presents a wide range of ancient and modern poetry works (odes, satire, and lyric poetry with religious and social themes), prose, and journalism. Creative festivals are also held throughout the country. The National Festival of Cultural Heritage in Jenadriyah, which is north of Riyadh, gathers local and foreign academics in the humanities and includes representatives from all regions of the country to discuss all genres: fine art, folk dance, painting, literature, poetry. (Famous camel-racing is also held there!)

If you look up “music of Saudi Arabia” on the Internet, the huge number of links to Saudi musicians might surprise you. (On a related note, the cellular telephone network in Saudi Arabia has been available since 1981; the Internet, from the late 1990s. Mobile telecommunication runs flawlessly.) Among the world’s most famous musical artists is the first pop star of Saudi Arabia, Abdul-Majeed Abdullah, as well as oud master Abadi al Johar. Egyptian pop music is also popular in the country. 

A ritual folk dance of Saudi Arabia is Ardha. This dance — with a sword — originates from ancient Bedouins. Drummers beat out rhythms and poets chant recitations, while people with naked swords dance shoulder to shoulder. Experts believe that al-sihba (folk music of the Hijaz) has its roots in Arabic Andalusia, a region in medieval Spain. In Mecca, Medina, and Jeddah, dancing is accompanied by al-mizmar, a local variety of the hoboy.

Photography is welcome in Saudi Arabia.

Artists spread their creativity on architectural ornaments, like friezes and mosaics, which include traditional forms of Islamic art. But this is not all. “Saudi artists want to express their minds,” says artist Ahmed Mater. “I think the world should listen to them.” His works and works of twenty-one other Saudi artists (nine of whom were women) were presented in Al Furusia Marina in Jeddah at an exhibition called “We Need to Talk.” The exhibition according to the organizers, the Edge of Arabia Fund, was an independent art initiative and became the most significant collection of the contemporary art of Saudi Arabia ever shown in Jeddah. The exposition was divided into three parts: past, present, and future. Forty-three works, including videos, sculptures, and installations, were displayed. Topics of each artwork included questions about humanity’s oil dependence and the potential threat of societal destruction with an economy based on oil extraction. “There are not so many people who knew that in Saudi Arabia there is a contemporary art,” said the organizers of the exhibition. Edge of Arabia opened its first exhibition in London in 2008, and since then, it has organized displays in Riyadh, Berlin, Istanbul, Dubai, and Venice.

The seriousness of religious architecture is countered by a rich civil architecture. There is an ongoing major construction of palaces, public buildings, and private homes in cities throughout Saudi Arabia; most of them harmoniously combine modern ideas with traditional design.

 

Faster than the wind

Like other Arabian countries, Saudi Arabia is a huge fan of sports. The main sports are football (soccer) and, of course, horse racing. Originally, horse-racing took place on the northeastern outskirts of Riyadh. Competitions were held for purebred Arabian horses owned by the King, and the jockeys were his sons; many of whom later started horse-breeding themselves. The first racetrack was built in 1965, when the official races were held. Now the racetrack, named in honor of King Abdulaziz, has undergone several renovations. The main racetrack is twenty-four meters wide and 2,000 meters long. Races in all major international distances can be held there. The stands can accommodate 3,500 spectators and are close to clubhouses with restaurants, tennis courts, swimming pools, and playgrounds.

The second major racetrack is in Taifa, in the western part of the country, where, due to the favorable climate, the races are held in the summer when it gets too hot in Riyadh. 

The racetrack in Riyadh is an integral part of the National Equestrian Club, which, among other things, is authorized to oversee the registration of all Saudi Arabian horses and imported horses. Races are held on weekends and are very popular among residents and visitors to Riyadh.

The main horse-racing event of the sporting calendar is the Royal Cup, which precedes the World Cup in Dubai. The names of Saudi Royal Cup members are well known at the international arena. The prize for the race is 400,000 Saudi riyals, or slightly more than $100,000. Typically, during the racing day, there are about ten races, and the prize money ranges from 54 million to 90 million riyals ($14,000 to $24,000). Young people in Saudi Arabia enjoy sports. Each year, dozens of international equestrian competitions are held in Saudi Arabia.

World heritage

UNESCO’s 2015 World Heritage List designates four historic architectural monuments in Saudi Arabia:

1. Mada’in Salih (Hegra, al-Hijra) is a complex of archaeological sites in the Hijaz in the North-West of Saudi Arabia (al-Madinah). It consists of 111 rocky graves (I century B.C.E. — I century C.E.), and a system of waterworks dating back to the ancient Nabataean city of Hegra, a center of caravan trade. Fifty rock carvings were discovered in Hegra dating back to 106 C.E. Saudis associate words in the rock-cut tombs with the fifteenth Sura of the Qur’an.

2. Ed-Diria is a city in Saudi Arabia, a western suburb of Riyadh. It is known for the fact that it is an origin of the Al Saud — the ruling dynasty of Saudi Arabia. From 1744 to 1818, ed-Diria was the capital of the first Saudi state.

3. Jeddah is a city in western Saudi Arabia — the second largest in the country and the economic capital of the Kingdom. The name of the city is close to the Arabic word “grandmother” and, according to some experts, may be a reference to the legend of Eve. Eve’s purported tomb used to be one of the attractions of Jeddah.

4. Rock art in the hail region of Saudi Arabia

 

Two Holy Mosque

The Custodian of the Two Holy Mosques is the title of the King of Saudi Arabia.

The Two Holy Mosques are the sacred mosques of Masjid al-Haram (the Grand Mosque) in Mecca and Masjid-an-Nabavi (the Prophet’s Mosque) in Medina.

The Grand Mosque of Al-Haram is the main and largest mosque in the world. There is the main sanctuary of Islam Kaaba in its internal yard. During Hajj, pilgrims from all over the world visit.

Masjid-an-Nabavi (the Prophet’s Mosque) is located in Medina and is the second sanctuary of Islam after the Grand Mosque in Mecca.