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UK has profound interest in helping Saudi modernisation

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A new BICOM research paper concludes that the UK has a profound economic interest helping Saudi Arabia implement its wide-ranging modernisation programme.

The report, published yesterday, says that Saudi Arabia needs to undergo rapid internal reforms to its unsustainable economic and social model by reducing its dependence on oil and creating economic opportunities for its young population – both men and women. This presents potential economic opportunities for British businesses, but the risks of economic failure or domestic backlash are significant.

The oil sector represents around 70 per cent of Saudi government revenue but due to unstable prices means the value of oil exports has fallen from $337bn in 2012 to $158bn in 2017. Saudi Arabia’s population is soaring, increasing from 16m in 1990 to more than 32m today, 40 per cent of under 24’s are unemployed.

The Kingdom, now effectively led by 33-year old Crown Prince Mohammed bin Salman (MBS), is embarking on its ambitious “Vision 2030” development plans, which the UK Government sees as a huge opportunity for British trade, investment and services.

In 2016 bilateral trade in goods and services with Saudi Arabia were worth nearly £9bn. 30,000 British citizens live and work in Saudi Arabia. After the visit of MBS to London in March 2018 a joint communique agreed “public procurement with UK companies in Vision 2030 priority areas, including on: education, training and skills; financial and investment services; culture and entertainment; healthcare services and life sciences; technology and renewable energy; and the defence industry”.

The BICOM report highlights the expanding ties between Saudi Arabia and Israel, particularly when it comes to pushing back Iran’s presence in the region, but cautions that they will remain covert unless a peace deal is achieved between Israel and the Palestinians.

The BICOM report states that Saudi royals “share an interest” in Jerusalem and in an Israeli-Palestinian agreement, and want to marginalise Islamist groups like Hamas and Iranian proxies like Hezbollah in order “to maintain legitimacy among their own public and across the Islamic world”.

The report concludes that the Saudis could support the Palestinian leadership and offer an incentive to the Israelis to forge an agreement, but that this issue is not a top Saudi priority.