Saudi Arabia to Invest $10 Billion in Russian Government-Run Fund
NEW YORK ( TheStreet ) - Russia's Vladimir Putin has turned to Saudi Arabia for help with the economy.
On Tuesday Saudi Arabia announced its sovereign wealth fund will invest $10 billion into the Russian economy over the next five years. The money will be invested with the government-run Russia Direct Investment Fund (RDIF), which will focus on infrastructure, agriculture and health care projects as well as some retail and real estate investments.
The Russian fund also forged a deal with the Saudi Arabain General Investment Authority. The partnership would allow both countries to source investment opportunities in Saudi Arabia and the Middle East.
The Saudi Arabian investment deals will provide welcome relief to the Russian economy from Western sanctions , which were imposed following Russia's involvement in Eastern Ukraine and Crimea back in 2014.
In addition, the deal could be aimed at ending the civil war in Syria. President Putin reaffirmed his support for President Assad back in June while urging surrounding countries to unite against the threat posed by Islamic State.
Saudi Arabia has also been vocal in expressing frustration with Washington's nuclear negotiations with Iran. If sanctions are lifted, Iran has announced its intentions to double oil exports, which would send Saudi oil prices plummeting even lower .
Moscow is also looking to Asian investors to replace Western financing. Putin signed a $2 billion deal with China in May to form a free trade zone and develop agricultural projects between the two powers. Trade between Russia and China has increased sixfold over the last 10 years. Leaders of the BRIC countries - Brazil, Russia, India and China - will meet in Russia on Wednesday followed by a meeting with the Shanghai Cooperation Organization as Putin turns his attention to forging more international partnerships.