Sunday, 27 September 2020 | News today: 0

Why Saudi Arabia?


Columnist: Timco Mucunski, PhD student in Law

I was surprised to hear the statements of certain politicians from a couple of days ago who raised the issue of Saudi Arabian significance to global political and economic stage. This issue, in my opinion, should not be surrounded with any dilemma at all, especially not among serious politicians and experts on geopolitical flows international economic relations, since facts undoubtedly confirm the important role of Saudi Arabia in our contemporary global system. Opportunity of Macedonian Prime Minister of visit Saudi Arabia and meet highest-ranked political and economic officials was evidence of the clear strategic vision of Macedonia in terms of foreign policy and economy, which is being implemented by the specific interest of establishment of strong connections with the most powerful global actors. They can contribute to an accelerated economic growth of the country and enhancement of our role in international relations.

Saudi Arabia is currently one of the most relevant countries in the world, particularly in OPEC, where it influences country to reduce their production and undoubtedly actively contribute to global oil prices drop. The role of this country in this process makes it a true political-economic leader in its region. These facts should be taken into serious consideration, since oil prices fall decreases the influence of Iran – a country that suffers serious economic and political consequences from the current situation on global stock exchange markets. Evident drop in Iran’s political and economic power automatically means increased influence of Saudi Arabia.

Anyways, the question which was a dilemma was what does Macedonia wants from its presentation in Saudi Arabia. In order to offer an adequate answer to this question, we would have to confirm the following two thesis: 1. Macedonia actively and successfully aims to attract as many foreign direct investments in the free economic zones, as well as to provide prospects for all interested entities in the free financial zones; 2. In order to reduce trade deficit and to put domestic production in motion, Macedonia puts serious efforts to increase export of domestic products on the perspective foreign markets.

In times when global economy is weaken, Saudi economy is expected to achieve some 4% growth in 2015 and 2016. Regardless of the fact that some see it only s a country which is one of the biggest oil exporters, due to structural changes in its economy Saudi companies become increasingly interested to invest abroad while the country rises into one of the biggest importers of agricultural products at the same time. Hence, it is especially significant that latest economic indicators are being taken into consideration, which according to which Saudi companies in 2013 have invested USD 26,1 billion in foreign direct investments. Simultaneously, as a result of the initiative of King Abdullah for agricultural investments abroad, in the past 6 months some 50 Saudi companies have decided to invest in agricultural production in various foreign countries. Saudi Arabian Industrial-Development Fund and the Fund for Public Investments (both under direct supervision of the Saudi government) open serious opportunities for Macedonian exporters who wish to place their products in this country and get certain subsidies from the Saudi government. At the same time, some of the Saudi investment funds are among the strongest investors in securities in the USA, great Britain and Luxembourg, while having their own branch offices in all countries which actively contribute to these markets. An example of it is ‘Sedco Capital’ investment fund (Saudi fund with headquarters in Luxembourg), having invested USD 300 million in real estates markets in several European countries.

Saudi Arabia is not just an oil exporter and “radical Islam”, as its being presented, on the contrary – it is an active investor in developed countries and serious potential importer of Macedonian products on its domestic market. The fact that Saudi Arabia has adopted a special platform on agriculture investments abroad is just one of the indicators which witness it. This country is a serious political and economic partner of developed countries in the world, therefore an additional effort should be made in the establishment of high-quality, strong, comprehensive bilateral relations with it. I am truly happy because of the political visit to this important country since it is a strong signal and honest intention of opening new mutual bilateral perspectives, as well as consequent additional motivation for accelerated economic growth of Macedonia and higher living standard of its citizens.