Phillip Hammond said it was part of the UK's support of Saudi economic diversification
UK finance minister in Saudi Arabia over 2030 talks
Philip Hammond, UK Chancellor of the Exchequer, arrived in Saudi Arabia on Sunday to meet with King Salman for a series of bilateral and economic meetings as part of Saudi Arabia's Vision 2030 policy.
The Chancellor was received by King Salman at Al-Yamamah Palace in Riyadh on Sunday and has met with Saudi officials as well as King Salman and the Crown Prince Muhammad Bin Salman on in Jeddah on Monday alongside the Prime Minister's special envoy for Vision 2030, the co-chairs of the newly established Private Sector Groups, Catherine McGuinness and Gerry Grimstone, and the CEO of UK Government Investments Mark Russell.
These engagement meetings continue the discussion from the Chancellor's talks with the Crown Prince earlier in March this year, where the UK and Saudi Arabia committed to establish Private Sector Groups as part of achieving the goal of $100 billion of additional trade and investment over the next ten years, and $30 billion invested in and through the UK.
The Chancellor announced that "the UK is working closely with Saudi Arabia as it takes positive steps forward through its’ ambitious Vision 2030 plan. We are uniquely positioned to offer the country our continued support with their economic diversification and social reforms. Increased trade and investment opportunities will benefit both of our Kingdoms."
Vision 2030 introduces revolutionary new reforms Saudi Arabia is pursuing to reduce its dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism. Due to fears of overreliance on oil and a volatile oil market, a number of countries, including the UAE and Saudi Arabia, have moved to invest in alternative sources of economic development to move GPD reliance away from oil production.
Currently, 30-40 percent of the real GDP of Saudi Arabia comes from exporting oil, tying its economic growth and market to its value and threatens the nation's long term economic growth.
The Vision 2030 was originally endorsed by a council of ministers in 2016 under the chairmanship of King Salman. The session declared that The Vision 2030 has 3 main pillars; the status of the country as the “heart of the Arab and Islamic worlds”; the "determination to become a global investment powerhouse"; and "transforming our unique strategic location into a global hub connecting three continents, Asia, Europe and Africa".
Saudi Arabia has always had a close relationship with the UK since the founding of the Kingdom in 1932. The total volume of trade between the two nations reached £8.4 billion in 2016 and just last year, UK sales of arms and military kit to Saudi Arabia hit £1.1 billion. Defence co-operation between the UK and Saudi Arabia extends across all military services, with a new military and security cooperation agreement signed last year.
It is keen to benefit from UK expertise and skills in finance, infrastructure and technology and its engagements are welcome at a time when Britain is looking to markets outside Europe to foster future growth. With the looming immanency of Brexit, the UK has been presented with an opportunity to open up investment opportunities into Saudi Arabia and the Middle East.