JAKARTA (TheInsiderStories) - Saudi Arabia King Salman bin Abdulaziz Al Saud is currently visiting a number of countries in the Asia Pacific, including Malaysia, Indonesia and Japan. Analaysts say that the visit reflects the increasing strategic importance of this region for Saudi Arabia.
“King Salman’s visit to Asia Pacific reflects the increasing strategic and economic importance of the APAC region for Saudi Arabia. As Saudi Arabia embarks on its National Transformation Plan, the investment of Asian countries into Saudi Arabia will be a key priority,” Rajib Wiswas, an analyst with IHS Markit said.
He said the traditional importance of the US as a key export market for Saudi oil is further declining.
The economic significance of the APAC region is continuing to increase, as APAC’s share of world GDP has risen from around 25% of world GDP in 2006 to around 33% of world GDP by 2016.
Since the lifting of UN economic sanctions on Iran, many of APAC’s major economies have been increasing their economic engagement with Iran in order to build trade and investment ties with this large Middle Eastern economy, Rajiv said.
“As a result of the collapse of world oil prices in late 2014, Saudi Arabia has embarked on a major strategic plan called the National Transformation Plan to diversify its economy and reduce its long-term dependency on oil exports,” he said.
The trade and investment partnership between Saudi Arabia and Asia’s economic giants of China and Japan, as well as the key ASEAN economies of Indonesia and Malaysia, is therefore likely to grow significantly in the decade ahead. Saudi Arabia will continue to play a key role in APAC’s energy security, and trade and investment ties will also broaden significantly as part of the Saudi National Transformation Plan.
In Indonesia, King Salman witnessed the signing of eleven memorandum of understandings (MOUs) between Indonesia and Saudi Arabia. The MOUs also show closeness and strong relationship between the two nations.
One of the eleven MoUs is the commitment of the Saudi government to invest in a project development worth US$1 billion, called The Saudi FUnd Contribution to the Financing of Development Project’. Apart from the signing of the 11 MOUs, both countries also agreed to conduct Joint Commission. (*)