Saudi, Russia Firm Up Trade Ties

RIYADH, 13 February 2007 -- Russian President Vladimir Putin yesterday concluded a two-day visit to the Kingdom as the first Russian head of state to visit the country.

Custodian of the Two Holy Mosques King Abdullah awarded Putin the King Abdul Aziz Medallion of Honor, the highest civilian award in Saudi Arabia, late Sunday evening.

The president later called on Crown Prince Sultan, deputy premier and minister of defense and aviation. The two discussed matters concerning developments in the region as well as ways to boost Saudi-Russian ties. Sultan also held a luncheon yesterday in honor of Putin and his delegation.

The president toured the King Abdul Aziz Historical Center where he saw the history of the Arabian Peninsula and the civilizations that lived here from pre-Islamic times to the present day. He also visited the old palace of the founder of Saudi Arabia King Abdul Aziz where he saw books, cars, photos, and some of the late king's personal belongings. Riyadh Gov. Prince Salman received the president on his arrival at the center.

Putin attended the Saudi-Russian business forum held in King Faisal Auditorium Hall where he spoke of ways to remove obstacles in the path of Saudi-Russian trade flow.

He said his country was willing to cooperate with the Kingdom in the field of nuclear energy, aerospace technology, railways, and the oil and gas sectors.

The forum was attended by Abdul Rahman Al-Rashed, president of the Council of Saudi Chambers of Commerce and Industry, Abdul Rahman Al-Jeraisy, president of Riyadh Chamber of Commerce and Industry, Tariq Al-Qahtani, president of the Saudi-Russian Business Council from the Saudi side, and many others.

"The Kingdom's business and products are extremely important to the Russian market," Putin said during his opening speech. He called on Saudi and Russian businessmen to increase their cooperation to search for joint investment venues." Other areas of cooperation are in oil and gas, as well as in the nuclear energy, transport, railways, and satellites," he noted.

Speaking on behalf of Saudi businessmen, Secretary-General of the Saudi Chambers of Commerce and Industry Fahd Al-Sultan said Saudi businessmen faced "many concerns and worries" that hinder the trade flow between the two countries.

Ahmed Al-Sanei, deputy president of the Saudi Export Development Center, mentioned the need to implement strategies to increase the trade flow between Saudi Arabia and Russia:

Reducing tariffs on Saudi exports, which is currently at 200 percent;

Easing travel permits for Saudi businessmen;

Protecting Saudi and Russian investments by rectifying protection laws;

Opening all sectors for investment between the two countries; and

Establishing direct air and sea links between Russia and the Kingdom.

Saudi businessmen called for a free-trade zone to be established between Russia and GCC countries and a joint Saudi-Russian bank with capital from both countries.

According to the Saudi chambers, the trade volume between the Kingdom and Russia has increased in the past seven years from $88.5 million in 1999 to $412 million in 2005. "Despite that, many necessary measures need to be taken to offer the appropriate climate for investment that would fulfill the needs of businessmen in both countries," said Al-Rashed.

On his part, Putin replied to the introduction, saying that Russia was taking measures to reduce tariffs on many global products entering the country.

"I am here present before you to find solution to investment hurdles in Russia," he said.

He said Russia had reduced tariffs on "more than a thousand global products" that have entered the Russian market. He pointed out that there were certain conditions for investing in Russia, which Saudi investors should take notice of.

"Russia is working on several joint investment venues with Sweden and other countries," he said. "It is also working on developing its ports so it could be areas for investment."

The Russian president said his country welcomed Saudi banks to open branches in Russia, stressing that Russian laws did not forbid foreign banks from operating in the country.

In a study submitted to council members prepared by the Council of Saudi Chambers of Commerce and Industry, it mentioned several challenges that remained unsolved between the two countries such as both countries having similar exports. Both the Kingdom and Russia export steel and metal products.

Saudi Arabia exports wood, coal, wood products, and paper products to Russia. It imports from Russia yeast, copper products, and steel.

The report mentioned that lack of information on Russian markets and the needs of Russian consumers was a problem for Saudi investors. Saudi investors who seek to open exhibitions in Russia are also facing problems starting with the slowness of procedures, delays at airports, slowness from Russian banks to clear financial transactions, and more.

As of the end of last month, the Kingdom and Russia had only five joint industrial and nonindustrial projects worth SR37 million.

By Raid Qusti