Saudi Arabia is actively pursuing additional free trade agreements and contemplating joining the BRICS group of emerging economies, as part of its strategy to enhance non-oil exports. The kingdom’s Minister of Economy and Planning, Faisal Al Ibrahim, shared these insights in a recent interview.
Al Ibrahim highlighted that the kingdom is engaging with a broad range of countries, though specific names were not disclosed. The goal is to expedite the growth of non-oil exports, which are increasing but not at the desired pace. Part of this initiative involves renegotiating some existing trade agreements to address current challenges.
As part of its broader economic diversification plan, Saudi Arabia is working to lessen its dependence on oil. The kingdom, with a $1.1 trillion economy, is investing substantially in becoming a global supply chain hub and developing new industries like electric vehicles and pharmaceuticals. These sectors are not only intended to meet local demand but also target export markets in the Middle East and Africa.
The trade discussions, conducted through the Gulf Cooperation Council (GCC) — a bloc of six Middle Eastern nations including major energy producers like the United Arab Emirates and Qatar — aim to simplify Saudi Arabia’s access to export markets. Additionally, they seek to secure imports essential for local manufacturing and value addition.
Currently, Saudi Arabia’s free trade agreements cover merely 5% of the global economy. The GCC is also negotiating a free trade agreement with the UK and looking to restart talks for an EU trade deal. Andrew Griffith, City Minister responsible for the British financial services sector, emphasized the importance of concluding the GCC free-trade agreement swiftly, viewing it as beneficial for both parties.
Saudi Arabia’s engagement in global economic forums, including the recent Future Investment Initiative, underscores its commitment to international economic cooperation. Additionally, the kingdom received an invitation in August to join the BRICS bloc, which includes China, Russia, India, Brazil, and South Africa. This potential membership is being assessed on an economic basis, with a focus on furthering Saudi Arabia’s economic transformation and contributing to global economic challenges, as stated by Al Ibrahim.
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