Opportunity Arabia 7 Conference – Middle East Association
September 23, 2010
London
Keynote Address – “The Bilateral Relationship”
Rt Hon Baroness Symons of Vernham Dean
Co-Chair, Saudi-British Joint Business Council
Vice-President, The Middle East Associatio
Sir Alan Munro: Now can I introduce to you, not that very much introduction is needed, our keynote speaker, Baroness Symons, Liz Symons, Baroness Symons of Vernham Dean, who is going to, from her very considerable experience of the Kingdom, familiarity with it, over a number of years, through the Saudi British Business Council, as a former minister involved with the Kingdom in both the Foreign Office and the Ministry of Defense, will now say something about the present state and outlook for our relationship with the Kingdom not only in the economic and commercial business sphere, much as we are focused on that today, but also, and this is essential, giving something of the political and cultural background of our close association and how this looks to us at this stage. Baroness Symons.
Rt Hon Baroness Symons of Vernham Dean: Thank you very much for that introduction, Alan. May I give my welcome to that which has been given by our chairman Sir Alan Munro, and by Michael today. Alan mentioned Michael’s role as Director of the MEA and I think it is fair to say that were it not for Michael we would not be having this series of seven very successful and well attended conferences on the opportunities that there are on Saudi Arabia.
Michael, I may not get the chance to say it again today in public but I want to say it now, thank you very much for everything you have done. Not just in relation to Saudi Arabia but in relation to our broader relationship with the Middle East. I’ve known the Middle East Association for a long time and you have taken it from strength to strength. Thank you for what you have done.
I always think of today as an opportunity for this gathering that we have not just to introduce companies to Saudi Arabia and the very extensive opportunities that there are, but also it’s a very welcome chance for those of us who know the country very well to meet again and to develop our contacts and our relationships and as always to learn something new about what is happening in Saudi, what has happened in the last year since we met and what we are able to look forward to in the coming year.
As we know a great deal has happened in the United Kingdom, notably of course the election of a new government, a coalition, which by its very nature is something that very few of us have experienced before. And we have seen I think in the last few months a really quite impressive blending of the philosophies of two political parties and of course of their election undertakings. Coupled with that I think they have rightly taken the opportunity to look again at foreign policy priorities and the policies that we have around export and investment. So it’s against that background that I have, as our chairman has said, been asked to take a look at our broader bilateral relationship between the United Kingdom and Saudi Arabia.
First of all I am very glad that this government in the United Kingdom has recognized and has championed what the previous government and indeed many before it did. And that is that there are two great principles of foreign policy. That is to advance this country’s security and to advance our prosperity. They go together hand in hand.
The government has acknowledged that the emergence of a networked world and the importance of rising economies is something that we have to adapt to. There’s rising economies like Saudi Arabia which is now of course a key member of the G-20 group. They have quite logically argued that this means there have to be new ways of approaching diplomacy and approaching international relationships. It means that we have to go beyond our traditional Transatlantic relationships and our key role in Europe.
And as someone who has a passionate interest in a commitment to our ties and relationships with the countries of the Middle East I welcome that very much. But I hope that the government recognizes, I’m sure that they do, that this new diplomacy is, and will continue to be very hard work for all of us.
As part of our bilateral relationship we share membership in many international organizations with Saudi Arabia, the United Nations, obviously, meeting this week at the General Assembly in New York, where we know that the Middle East peace process and the ambitions of Iran in relation to their nuclear capability will be key discussion points.
We share membership of the World Trade Organization. Indeed, I remember very well that this country championed Saudi Arabia’s membership giving support and advice on their candidature. We are both of course members of the IMF and the World Bank and Saudi Arabia’s efforts to grow its economy and improve radically its position on the ease of doing business index have been truly impressive in the last seven years.
We are also both members of the increasingly important G-20 group of the most wealthy nations in the world, and both our countries recognize that the responsibilities carry with it the real commitment to deal with the scourges of poverty and deprivation in so many parts of the world. And we are both key countries in our respective regions, we in Europe and Saudi Arabia in the Middle East. Two Kingdoms with vastly different cultures, histories and laws, but both with a critical role to play amongst our neighbors.
So what do we have in common in terms of policy?
Well, the Beirut Declaration of 2002, which of course was initiated by King Abdullah, then the Crown Prince, known as the Arab Peace Initiative was a landmark point in the Middle East peace process and remains a crucial building block today in the search for a lasting peace. It was followed by our commitment to a very similar process through the Two Kingdom solution that we endorsed. And in the Middle East, Saudi’s position was then endorsed by the Arab League in the Riyadh Summit of March of 2007 and confirmed again in 2008 in their approach to President Obama. King Abdullah also brokered the Mecca agreement forming the Palestine National Unity government in 2007 and like the United Kingdom, Saudi Arabia remains committed to ensuring peace between Israel, Palestine and of course all the countries of the Arab League.
On other foreign policy issues we see some further similarities. Saudi has supported the political process in Iraq recognizing the success of the revised Baghdad security plan and as Prince Saud, the Kingdom’s foreign minister has declared, Saudi is committed to cutting Iraqi debt.
Saudi is also acutely conscious of and concerned about Iran’s nuclear ambitions and in my experience in recent years, in the many broad based discussions I have had with politicians, diplomats, business men and women in the Kingdom, is that Iran has become the crucial issue for the Saudis in terms of their regional security.
So, in all these important areas of foreign policy we share much. We share much in terms of analysis of the problems and we share a great deal in our approach as to how we should deal with those problems.
And of course Saudi is a vital partner to the United Kingdom on our global counter terrorism efforts. Over the last 12 years or so I have seen that relationship first hand. First as a minister of defense and then as a foreign office minister and now as a frequent business traveler. And Saudi has a great record of condemning acts of terrorism. They were one of the first countries to offer real help to the United Kingdom after the 7th of July attacks and they recognize that the rise of Al Qaeda is as much a problem for their people as it is for ours.
But our ties go further. And before I talk about the issues of trade and investment I do want to say something about our cultural relationship with Saudi Arabia. First, the British Council. It does stunning work with Saudi Arabia with about 100 personnel present throughout the Kingdom, providing English language training but also training for teachers, training for women, and vocational training, something that isn’t as widely recognized as it should be. The operation of the British Council in Saudi Arabia, is in my view, one of the most impressive we have anywhere in the world.
Secondly, we have an enormous number of Saudi students in UK universities and that continues to grow. The last figures I’ve been able to get were for 2009, when there were over 12,000 Saudi students at British institutions, all on Saudi scholarships.
And every year thousands of British Muslims travel to Saudi Arabia to perform Hajj and Umrah. I’m very proud of the fact that it was in 1999 that this country became the first predominantly Christian country to organize an official Hajj delegation of Foreign Office Muslim officials to assist the 20,000 or so British pilgrims at that time and that figure has now risen to over 100,000 a year.
And of course there is our unique relationship through the Two Kingdom’s dialogue, established in 2004, to give us the opportunity both here and crucially in the Kingdom of Saudi Arabia to discuss a very wide range of issues, which would have been really quite unthinkable ten years ago.
Importantly that dialogue includes both young men and young women and it creates an environment where everything from human rights, religion, health, education, and the economy are discussed. It has been a genuinely innovative form of exchange led and supported by both governments through our respective foreign ministers.
So against this background of an increasingly frank and broadening relationship the business community has, quite rightly, taken advantage of the export and investment opportunities offered by the wealthiest country in the Middle East.
Saudi Arabia has we all know has 25 percent of the proven oil reserves worldwide and it produces 11 million barrels of oil per day. It has an estimated GDP of $438 billion – I can hardly get my head around that figure. And that’s the figure, current figure for this year. It has an annual growth rate now of 3.7 percent. And interestingly, an increasingly proportion of that growth figure is now supplied by non-oil exports. And our two economies have recognized the respective values to each other.
Interestingly in these straightened times in the period January to June this year United Kingdom exports to Saudi Arabia this year were 1.5 billion pounds. That was an increase of over 41 percent over the same period in 2009. That is an extraordinary figure for these straightened times. And imports have also been growing, imports from Saudi to us by a very much more modest figure, some 2 percent, but nonetheless a positive upward trend and a real turnaround from previous years. We’re the second largest foreign investor into the Kingdom after the United States with approximately 200 UK/Saudi joint ventures and a total investment estimated of some 18 billion dollars.
And even in these difficult times, much as we have to reflect on the worldwide setbacks that there have been, let us remember that the United Kingdom has a huge amount to offer to Saudi. We hear a lot these days about what has gone wrong with our financial services, but let’s also try to remember what has gone right and why we are such an attractive place to do business. The City of London handles 34 percent of the world’s foreign exchange trade, 22 percent of the global foreign equity trade, 43 percent of the world’s over the counter derivatives trade and 70 percent of all Euro bonds. We are the leading Western center for Islamic finance with six fully compliant firms and 20 banks supplying Islamic financial advice. So we are indeed a natural home for international business and I look forward very much what Jason Peers will be able to tell us about the opportunities in the financial sector later today.
As chair of the British side of the Saudi-British Business Council I see the extraordinary range of business opportunities for British investors, British exporters and British companies throughout Saudi Arabia. The British Council exchanges with our Saudi counterparts is a relationship which has grown in its depth and its breadth and importantly in its confidence in the last few years. The support of the Arab British Chamber of Commerce, of course, is enormously important and our British expertise and of course the crucial work that the MEA has done and continues to do. They are enormously important and we have to add to that list now City UK, the old IFSR, which is doing such great work in the financial sector.
I also want to thank the Foreign Office and the United Kingdom Trade and Investment Office for all the work that they do. I want to particularly thank Paul Williams who I know is here today and of course Chris Innes Hopkins who will be taking over from him and I know that he will be a great success. I have worked for years with Chris and he is hard working, diligent and extremely knowledgeable.
Turning back to what Saudi has to offer us and what we should be thinking about today. We all know that there are four new economic cities, the largest of which, I was staggered to see, is planned to be the size of Hong Kong. That is of course, the King Abdullah Economic City, with its port, its tourist complex, its financial center, industrial estate and residential areas.
There are currently plans for over $100 billion worth of projects in oil, gas, and petrochemicals over the next ten years. There are major rail projects which have been already awarded to prime contractors to link major centers of population and where I am sure there will be a great deal of subcontracting. There is an expanding mining sector and I very much look forward to hearing about that from Engineer Abdullah Abdulgader later today. And of course there are major upgrade plans for Madinah and thank goodness for Jeddah Airport. I look forward to the Jeddah airport upgrade very much indeed. And we’ll hear all about those from our excellent speakers later today.
But Saudi’s investing not only in its physical infrastructure but also in the future of its young people through the educational expansions it’s making, its schools, colleges and universities and very particularly as well in vocational training. They are also looking at their health care with expanding teaching hospitals and local clinics. The terrific King Abdullah University of Science and Technology is a great example of this investment in the future. And we in this country have increasing and excellent exchanges on educational issues and the growing Saudi capacity and thirst for training and education in the future.
On climate change, Saudi Arabia’s views are starting to evolve. We know now that there are of course, many, a great deal of work going on to make oil a greener fuel, but of course to ensure there is still a fossil fuel basis on which their economy depends. But interestingly Saudi is also now engaging in renewable energy projects and there are options being looked at in all sorts of different ways. In December 2008, the oil minister, Mr. Naimi, announced a policy of Saudi export of their solar energy as well of course as their export in hydrocarbons.
The UK and Saudi as well, along with Norway and the Netherlands together also cooperate on carbon capture technology as part of the strategy for dealing with climate over the next decade or so.
In short, ladies and gentlemen, whatever your industry, whatever your expertise, there is a real possibility that you will find a market for it in Saudi Arabia. The appetite for expertise in project management and capacity building has grown exponentially over the last few years. The emergence of the Saudi Arabian General Investment Authority under the leadership of Amr Al Dabbagh is great example of this, together with the emergence of the crucial role of the Central Bank under its new governor, Mohammad Al Jasser. And I think too we can acknowledge that the Saudi Chambers of Commerce are amongst some of the most vital in the world. My point is that Saudi’s institutions are changing too.
So in the coming twelve months much is planned to take full advantage of the opportunities for the United Kingdom’s investment and exports and of course the participation of the business community in the fullest sense. Here in the United Kingdom the new government has pledged great emphasis on supporting business and commercial diplomacy and in a speech earlier this week, for City Week, the Foreign Secretary spoke of his determination to champion the British economy. Indeed the Commercial Secretary, Lord Sassoon is in Saudi Arabia today doing exactly that.
So as chairman of the British side of the Business Council I applaud and support these policies and I hope that we shall see more detailed views about how we can all add value to them. For example, greater clarity on government policy about the export of nuclear energy capability is needed and it’s needed soon given the huge competition we face, particularly from China and France. Greater clarity is also vital on defense exports. The defense export arm of the government, DESO, has the admiration of many of our competitors around the world. And we need to know with certainly that that industry which provides so many high grade manufacturing jobs will continue to enjoy full government support within the very clear regulatory framework which is rightly set for it.
So I suppose that my message today is really a rallying call to everyone here. We all want our economy to succeed. Whatever our politics, whatever our commercial interests, whatever our trade, we all know that our exports overseas and our ability to attract inward investment in the United Kingdom are vital to this country’s prosperity. And for us Saudi Arabia is an ideal partner in securing that prosperity over the coming years.
I am now, as the chairman mentioned, the chairman elect of the Arab British Chambers of Commerce and together with our very able and talented Director General Afnan Al Shuaiby, I look forward to forging more partnerships with United Kingdom companies seeking business and investment both in and with Saudi Arabia. I look forward to more partnerships with companies in Saudi Arabia itself.
So let us resolve to do everything we can to seize this moment of opportunity and make this the best year ever for our commercial relationship with Saudi.
Thank you.
Sir Alan Munro: Thank you, Liz, very much.
That was the most appropriately upbeat introduction to the Kingdom in all the aspects of our relationship and the whole breadth of the opportunities available to you, have been spelled out there. And you’ll be hearing more about it, whether it be infrastructure and education and of course as Liz mentioned in defense too which is of high priority, growing priority for the Saudis and where British industry has a very considerable stake, and one that I think needs to be acknowledged and respected.
She also mentioned and I should point this one up, because it’s occurred in previous conferences, there’s been a bit of an inhibition in people’s minds, the security scene does appear now to have settled. This is a very welcome development in the Kingdom. The Saudis have managed to, in a degree of cooperation with ourselves, get on top of that threat, which two or three years ago was a worry for overseas business and rightly so. But it’s something that I believe we can put behind us now, and so I think we should take that point onboard.
I would also mention that after an interval of some months a new British ambassador has just taken up his appointment, Tom Phillips, in Riyadh. And that’s a point we should also take encouragement from, meaning that the Embassy as Paul Williams will know can now operate at full strength and fulfill that role which the Saudis look upon it to do.
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Rt Hon Baroness Symons of Vernham Dean
Co-Chair, Saudi Business Joint Business Council
Vice-President, The Middle East Association
Rt Hon Baroness Symons of Vernham Dean is a senior Labor member of the House of Lords and a business leader. Formerly Deputy Leader of the House of Lords, Baroness Symons was a Minister in the UK Government from 1997 until stepping down in 2005. Among her government posts she was Minister for the Middle East, Minister for International Trade and Minister for Defense Procurement, and the Prime Minister’s envoy to the Gulf.
Baroness Symons is involved with a number of commercial organizations, including roles as a non-executive director of both British Airways and Caparo, and as an adviser to other companies, including DLA Piper, the CCC Group and Rio Tinto.
She has a wide range of experience, in the Middle East in particular, and currently chairs the UK Parliament’s all part group on Qatar, the Saudi-British Joint Business Council and the British Egyptian Society. She is also the Chair of the European-Atlantic Group, UK Chair of the Advisory Board of the British American Project, Vice-President of the Middle East Association and is board member of British Expertise, The Arab British Chamber of Commerce and the Egyptian British Business Council.
Source: Middle East Association
http://www.the-mea.co.uk/
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