Saudi-French Ties Get New Impetus

by shariff mohammed | Dec 14, 2015

France’s relations with Saudi Arabia are set to reach new heights, said French ambassador to the Kingdom Mr. Bertrand Besancenot. In an exclusive interview with Shamsul Huda of the Saudi Commerce & Economic Review, he pointed out the resounding success of the recently concluded Saudi-French Business Opportunities Forum and the Joint Commission meeting in Riyadh. The French diplomat focused on the age-old bilateral ties which have stood the test of time hoping that these deep-rooted relations  will be strengthened further in years to come. “Our relations are very close, strong and based on confidence,” he said. Excerpts of the interview:

Please explain the renewed bilateral relations between the two countries;

I would not talk about a renewed bilateral relation because as you may know the partnership between France and Saudi Arabia is ancient. I would like to remind you that the first French consulate has opened in Jeddah in 1841 and also that France was among the first countries to recognize the Kingdom of Saudi Arabia when it was established. Every French and Saudi diplomat has in mind the historic meeting between General de Gaulle and King Faisal Bin Abdulaziz in Paris in 1967. Having recalled that historical elements, I do believe that this second Saudi-French Business Opportunities Forum, as well as the second meeting of our joint Commission, both held in Riyadh on the 12th and 13th of October respectively, are the expression of the vitality of our trustful and win-win relationships with the Kingdom. And as great projects need great means, Riyadh hosted last October a large French delegation of more than 130 officials. Among them prominent were Mr Manuel Valls, Prime minister, head of delegation, Mr. Laurent Fabius, Minister of Foreign Affairs and International Development, Mr. Jean-Yves Le Drian, Minister of Defense, Mr. Jean-Marie Le Guen, Minister of State for Relations with Parliamentary and Mr. Alain Vidalies, Minister of State for Transport, the Sea and Fisheries. Besides, more than one hundred French CEOs attended the Business event.

After the visit of the French President, François Hollande, to Riyadh in May 2015, the visit of the French Prime minister last October marked the intense relations of friendship and confidence between France and Kingdom of Saudi Arabia and showed a great convergence of views on many regional and international issues.

 

What were the major issues discussed in the recent meeting between the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz and French Prime Minister Manuel Valls?

King Salman Bin Abdulaziz and French Prime Minister Manuel Valls discussed bilateral relations between our both countries mainly in the areas of political, defense, economic but also trade and cultural matters. Regional and international issues, including Syria, Iran and Yemen, were addressed as well. They also talked about the fight against terror, particularly Daesh.

The French delegation had also meetings with HRH Crown Prince Mohammed Bin Naif, HRH Deputy Crown Prince Mohammed Bin Salman, HE Adel Al-Jubeir, Minister of Foreign Affairs, HE Twafiq Al-Hussein, Minister of Water and Electricity and HE Khaled Al-Fateh, Minister of Health as well as HE Hashim Al-Yamani of KACARE, and HE Abdulrahman Al-Mufadi and HE Yasser Al-Rumayyan of the Public Investment Fund.

The French and Saudi Arabia relationship is very close, strong and based on confidence. In that context, our leaders both noticed that they were sharing a lot of common and mutual interests. The excellence of our strategic relation is a solid ground for enhancing our partnership in order to develop our exchanges in all areas, as well as to contribute to building a steady, peaceful and prosperous Middle East.

During the recent Saudi-French Business Forum, a series of agreements worth over $11 billion were signed. What are the sectors to be covered by these agreements?

Indeed, these Saudi-French Business Forum and Joint Commission meeting were really successful and I would say fruitful for the bilateral relations between our two friendly countries.

In this framework, our agreements covered an allocation of fund dedicated to investing in French private funds with a focus on renewable energy, a project of cooperation in the renewable energy between K.A.CARE and the French Atomic and Alternative Energy Commission and fund for export financing. Besides, we decided to establish a plasma production facility in the Kingdom, a naval research center and a joint working group on naval projects and to launch negotiations with the aim of providing the Kingdom with satellite capabilities of observation and communication. We agreed to increase military exercise and training cooperation as well. Moreover, I would like to point out that Saudi Arabia has lifted the embargo on French beef and to underline that our both countries stressed intention to facilitate issuance of visas for people working on strengthening bilateral economic ties. Lastly, our two countries reaffirmed their support for an ambitious, equitable and successful outcome of the Paris Climate Conference (COP21) to be held in December 2015.

French companies have already strong presence in Saudi Arabia with significant investments estimated at around $15 billion. Which are major French companies currently operating in the Saudi market?

Major French groups have indeed a long tradition of business with Saudi Arabia. There are many examples like Total with Saudi Aramco associated in a JV called SATORP for a production capacity of 400 000 b/d of crude oil. Many others are operating in the Kingdom such as Crédit Agricole (with BSF), Engie, Air Liquide, Alstom or Schneider Electric. French groups have been successful on major projects in many fields (electricity and water, refining, petrochemicals, hotel industry, services, food industry, engineering, civil works, finance, insurance, etc.). Based on their word-class know-how and experiences, they strongly wish to consolidate their presence in the Kingdom in the long term, with a strong commitment to achieve high rate of Saudization and to contribute to know-how and technology transfer. The first priority is now to move a step forward on this partnership for other sectors such as agriculture, health or nuclear and renewable energies and to encourage more Saudi and French SMEs to work together on these projects in the wake of big groups. This appears to be the best way to foster innovation and job creation in both countries.

Are French Companies facing any obstacles in their attempt to enter the Saudi market? If so, what are these obstacles?

I would not use the word obstacle because our companies have a sense of challenge and an ability to adapt to the new environment. The Saudi market offers tremendous opportunities and French companies are willing to join it through win-win partnerships. For instance, I would like to mention that the French companies in Saudi Arabia have achieved high Saudization rate, with 36% of Saudis among their staff (more than one employee out of three), while the local Labor law demands 20%.

The French companies are very interested in investing in the Kingdom and are, at the same time, welcoming Saudi investments in France. As an instance of this matter of fact, I will remind you that 360 French -representing more than 120 companies- attended our Forum last October, which was the largest French Business delegation to visit the Kingdom in the history of the bilateral relationship.

Furthermore I would like to say a word about the Saudi-French Business Council (SFBC) and its major role in the bilateral relations. Its President Mohamed Bin Laden is very committed to reinforcing the business relations between the two countries. The SFBC supported in the organization of the two business forums for great success. Composed by Saudi businessmen it showed how we can work together to share experiences and common business sense.

According to you, what is the current state of the Saudi economy?

Saudi Arabia is a key partner, the first in the region. We pay a particular attention to the economic development of the Kingdom which is the only Arab country G-20 member and the first Arab economy. Saudi economy’s fundamentals remain strong despite the falling oil prices. The Kingdom has a lot of strength to face the economic change like low public debt, strong financial institutions, a solid private saving and healthy reserves.

Please give us an idea if there are major Saudi investments in your country?

It is clearly one of our top priority to increase and diversify Saudi investments in France which amount to almost 600 M€ and are mostly directed towards real estate. France is one of the leading destinations for foreign investment in industry and the fourth largest FDI receiver in the world. The entrepreneurial and innovation policy is also proving effective, since France has been ranked as one of the leading countries for R&D support and for newly founded businesses. The new Competitiveness Pact put into place by President Hollande’s government will furthermore enhance the attractiveness of the French economy, creating tax discounts (4-6%) for industrial companies, maintaining important tax discounts for innovating companies (tax rebate of 75% of the research budget for the first year, 50% for the second year) and implementing short-term financing for small and medium size enterprises (SMEs). By easing the entrepreneurial process and fostering innovation, the French industry offers a lot of different investment opportunities for Saudi investors, and represents a major know-how transfer potential in a long-term cooperation perspective.

Please highlight possible cooperation particularly in the fields of nuclear energy, tourism and education between the two countries;

A bilateral cooperation between our two countries already takes place on all the fields or areas you have just mentioned, at a state level as well as at private or public companies level. Together, during the coming months, we will do our outmost in order to deepen these opportunities of cooperation for mutual interests.

Please give us details of latest bilateral trade figures between the two countries.

Saudi Arabia and France have long enjoyed a strong economic relationship, with bilateral trade worth an estimated 10 billion Euros (SR42 billion) in 2014.  Indeed, the Kingdom is France’s top supplier of oil, while France is the 3rd largest foreign investor in the Kingdom, with a stock of foreign direct investment of $15.3 billion and some 80 French companies currently operate in Saudi Arabia.

 

 

  

 

 

 

 

 

 

 

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