Strong Russia-Saudi Ties Show Promise of New Heights Ahead of Putin's Visit to Riyadh

Sputnik, 13.10.2019

MOSCOW (Sputnik), Anastasia Dmitrieva - Russia and Saudi Arabia have come a long way in terms of boosting bilateral relations in the past few years, from joint investments and cooperation in the field of energy to cultural projects and easing visa policies.

Russian President Vladimir Putin ’s upcoming visit to Riyadh will become a culmination of this hard work, but there remains even greater untapped potential for cooperation.

As the presidential aide Yury Ushakov announced last Thursday, the Russian president is set to visit the Kingdom October 14. This historic state visit may further boost the countries’ multifaceted partnership in the fields of energy, investments, industry, agriculture, infrastructure, transport, natural resources and modern technologies, and build on the success of Saudi Arabia King Salman bin Abdulaziz Al Saud ‘s visit to Moscow in October 2017.

During the visit next week, Moscow and Riyadh will be announcing new agreements worth over $2 billion, according to Kirill Dmitriev, the head of the Russian Direct Investment Fund (RDIF).

History Behind

The Soviet Union was the first country to recognize the independent Kingdom of Hejaz and Nejd, which was renamed the Kingdom of Saudi Arabia in 1932. Moscow established diplomatic relations with the Kingdom of Hejaz and Nejd in 1926, but these ties were severed in 1938 due to the Soviet Union’s domestic problems and Saudi Arabia’s change of policy in favour of closer cooperation with the West.

Soviet/Russian-Saudi diplomatic relations were restored in 1991 with Saudi Arabia recognizing the Russian Federation as the legal successor of the Soviet Union.

Russian President Vladimir Putin made his first official visit to Saudi Arabia in February 2007, which was also the first visit by a Russian head of state to the Arabian Peninsula.

The way for the new level of the bilateral relationship opened in 2015 when then-Deputy Crown Prince Mohammad bin Salman met Russian President Vladimir Putin during the annual meeting of the RDIF international advisory board. This meeting began Saudi investments in Russia that never happened before in the history of the two countries

Joint Investments

In 2015 the countries’ investment cooperation started with an agreement between the RDIF and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) to invest $10 billion in Russia’s economy in a bid to support attractive infrastructure and agriculture projects, among others.

Over the course of this partnership, the RDIF and PIF have already made and approved investments worth more than $2.5 billion and created the Russia-Saudi Investment Fund in 2017 with the total committed capital of $10 billion.

In total, around $2 billion worth of funds from the Russian-Saudi foundation would be invested in Russia in 2019, and bilateral investment cooperation is only expected to double in the next few years due to Russia’s and Saudi Arabia’s success within the OPEC+ group.

According to Kirill Dmitriev, there are currently 20 investment projects worth $10 billion in the Saudi-Russian investment pipeline.

In early October, Dmitriev visited Riyadh to discuss the RDIF’s role in the bilateral cooperation between Russia and Saudi Arabia and to prepare for the upcoming visit of President Putin.

During his meeting with the Crown Prince Mohammed bin Salman and Saudi ministers, Dmitriev received the highest honour in Saudi Arabia, the King Abdulaziz Second-Class Order of Merit for his role in strengthening bilateral cooperation. This made the RDIF CEO the second Russian national after Putin to be awarded this honour.

"The meeting with the leadership of the Kingdom of Saudi Arabia and personally with Crown Prince Mohammed bin Salman Al Saud on the eve of the official visit of the President of the Russian Federation has demonstrated outstanding potential for cooperation between our countries," Dmitriev said. 

"Joint efforts of President Vladimir Putin and Crown Prince Mohammed bin Salman resulted in a massive transformation of Russia-Saudi relations. I am convinced that strengthening not only economic but also cultural partnerships will mutually enrich the peoples of the Russian Federation and the Kingdom of Saudi Arabia and will allow us to realize the huge potential of cooperation and significantly increase the number of joint projects in the future," the RDIF CEO added.

During the visit Kirill Dmitriev also toured Saudi major corporations, namely SABIC, SALIC, SAR, PIF and others, promoting Russia-Saudi investment cooperation

Energy Alignment

One of the most prominent examples of the fruitful cooperation between Russia and Saudi Arabia remains the agreement on oil production curtailment between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries. The so-called OPEC+ deal was signed in December 2016 and stipulates oil production cuts of 1.2 million barrels per day until April 2020. Moscow and Riyadh act as the main drivers of the whole group. Russian Energy Minister Alexander Novak is frequently in contact with Saudi Energy Minister Prince Abdulaziz bin Salman - as well as his predecessor Khaled al-Falih while he was in office - with regard to what needs to be done to stabilize the energy market.

"Saudi Arabia and Russia together have become the major conductors of this market orchestra and where the others just follow suit," Ruba Husari, non-resident fellow at the Middle East Institute, said. 

Despite several setbacks in the form of crises in several OPEC countries - including Libya, Venezuela and Iran - or the United States attempting to take the group’s share in the market, the two countries always present a united front when it comes to the many challenges in the energy industry. Most recently, on the sidelines of the G20 summit in Japan's Osaka in June, President Putin and Saudi Crown Prince Mohammed bin Salman agreed on a single position on the future of the OPEC+ deal, deciding to extend the agreement on the same conditions even before the whole OPEC+ group officially met in Vienna.

"The rapport between MBS [Saudi Crown Prince Mohammed bin Salman ] and Putin illustrates that both Moscow and Riyadh will be coordinating on market price," Dr. Theodore Karasik, a senior adviser at Washington-based Gulf State Analytics, told Sputnik. However, the OPEC+ deal is not the only energy issue on which the two nations work together. Although Saudi Arabia missed the opportunity to participate in Russia’s Arctic LNG 2 project - Riyadh was ready to invest around $5 billion in the project and the deal was close to being reached, but the year-and-a-half-long talks were subsequently suspended - it remains interested in other similar projects. 

At the moment, Saudi Arabia is considering taking part in the development of a methanol plant in Russia, while Russian companies are showing great interest in the Kingdom’s participation in their LNG endeavours.

Sibur, Russia’s petrochemical industry giant, jointly with Russian Direct Investment Fund, Saudi Aramco, Total and Sinopec is considering participation in the construction of a rubber plant in Al- Jubail production cluster.

"In Saudi Arabia, our company Sibur is considering participation in the construction of a plant for the production of rubber’’, Russian Energy Minister Alexander Novak announced after the latest meeting of the Russian-Saudi Intergovernmental commission in Moscow in June. 

Cultural Cooperation

Since 2017, Russia and Saudi Arabia have held a number of successful events celebrating each other’s cultures. Russian Direct Investment Fund joined efforts with Saudi partners on implementing several key culture projects during the visit of King Salman to Moscow.

Saudi Culture Week in Moscow organised with the support of Russian Direct Investment Fund (RDIF) and The Ministry of Culture of Saudi Arabia has become one of the key events within the framework of the visit.

The "Russian Corner" exhibition was arranged by RDIF, PIF and St. Petersburg’s State Russian Museum in October 2018 as part of Saudi Arabia’s Future Investment Initiative economic forum, where works by Wassily Kandinsky and Pavel Filonov were on display. The Russian avant-garde art exhibition in Saudi Arabia followed first-ever concerts of Russia’s Mariinsky Orchestra in the Kingdom. The orchestra performed works by Sergei Prokofiev, Antonio Vivaldi, Pyotr Tchaikovsky and Wolfgang Amadeus Mozart, among others, in the recently opened state of art King Abdulaziz Center for World Culture. For many Saudis, it was the first-ever classical music experience.

The collaboration became possible due to Saudi Arabia's ongoing transformation under its "Saudi Vision 2030" program. The initiative already led to three other achievements last year: the country launched its Ministry of Culture, opened its first public theater and even participated in the 71st Cannes Film Festival.

"Our Culture Our Identity’ [the program’s motto] sets out several ambitious initiatives that are to be supported by the new Ministry. These include a culture fund to support artists, scholarship programs and art awards. The Saudi Ministry of Culture looks forward to collaborating with its Russian counterparts on several exciting initiatives in the future," the ministry said. 

The Russian Direct Investment Fund teamed up with international partners from China, Japan and Saudi Arabia and the State Hermitage Museum to open the largest exhibition dedicated to the role of artificial intelligence in modern art "Artificial Intelligence - dialogue of cultures" at the St. Petersburg International Economic Forum in June. Ministry of Culture of Saudi Arabia and PIF supported the exhibition where works of two Saudi artists were shown. Lulwa Al Homoud, for example, developed an abstract graphical form of language from the Arabic alphabet.

"My artwork 'Being and Existence' examines the link between language and emotions by developing an abstract form of language derived from the Arabic alphabet," the Saudi artist explained. 

Saudi Arabia’s first minister of culture, Prince Badr bin Abdullah bin Farhan Al Saud, visited Russia in 2018. There, he met with the senior management of The Bolshoi and The Mariinsky theaters, and visited the Hermitage Museum, where future collaboration in the spheres of museum work, restoration and archaeology, as well as an exhibition exchange was discussed.

Moreover, Saudi Arabia will participate in the St. Petersburg International Cultural Forum as a guest of honour in 2021.

Tourism Potential

Apart from presenting its culture abroad, Saudi Arabia would like to attract more tourists, including those from Russia. As part of Saudi Vision 2030, Riyadh opened its doors to tourists for the first time ever in late September, launching multiple- entry visas to ease their travel. Russia is among the 49 nations entitled to electronic visas and visas on arrival.

Previously, a tourist visa to Saudi Arabia could only be obtained with the purpose of attending a certain event. But now tourists will be allowed multiple entries with durations of up to 90 days a year. The historic move is expected to boost the country’s GDP by 7 percent to 10 percent, and lessen its dependence on oil - both of these objectives are enshrined in Saudi Vision 2030.

"Russians can get online visas now. We are counting on Russian tourists and we will welcome them. We want them to come to learn about Saudi Arabia and enjoy our culture and food... we have beautiful winter, while you have very tough winter, so you can come to Saudi Arabia in winter and enjoy the beautiful pleasant weather," Ahmad Al-Khateeb, the chairman of the Saudi Commission for Tourism and Heritage, said. 

Of the 24,000 tourist visas issued in the first 10 days of the new visa policy, 484 were given to Russians - people from China, the United Kingdom and the United States visited the country the most over the given period.

Saudi Arabia expects the new visa program to create up to 1 million new jobs, increase the capacities of Saudi airports by 150 million new passengers per year and require 500,000 more hotel rooms across the country, all within the next decade.

While Al Ula, a UNESCO World Heritage Site, is currently being developed as the first tourism destination in Saudi Arabia, the Kingdom is also working on opening other touristic destinations, including a $500 billion innovative "mega-city" called NEOM and the Red Sea Project. The majority of projects will be funded by the PIF, which also works with the RDIF on mutual investments.

"We are working with RDIF to invest in both countries - Russia and Saudi Arabia. When we have opportunities for them in Saudi Arabia, they will definitely consider [the opportunity of investing in the country]," the Saudi tourism chief said. 

In addition, Saudi Arabia and Russia will sign a number of memorandums of understanding and several deals on tourism during President Vladimir Putin ’s visit to Riyadh.

"The relationship between Saudi Arabia and Russia in the last few years has been a great relationship. We are completely aligned on all different fields - political, economic or social. We will be pleased to have His Excellency President Putin," Al-Khateeb stressed. However, it is still unclear when Moscow and Riyadh will open direct flights - they have been eyeing the possibility of having 14 direct flights a week with the potential for more in the future. 

"We will push Saudi Airlines to work on opening direct air flights because this is particularly important. We will study the issue and open destinations based on what Russian tourists would like to do," the Saudi Commission for Tourism and Heritage told Sputnik.

Space Initiatives

Bilateral space cooperation is another area of mutual interest for Russia and Saudi Arabia. Russian launch vehicles have been putting Saudi communications and remote sensing satellites into orbit since 2000, while Russian State Space Corporation Roscosmos and Saudi King Abdulaziz City for Science and Technology (KACST) have been working together on space exploration and the use of the GLONASS system.

GLONASS is one of four global satellite navigation systems, the others being China's BeiDou, US-owned GPS and the European Union's Galileo. The GLONASS constellation comprises a total of 27 satellites, including 24 operational devices.

At the latest meeting of the joint Russian-Saudi Arabian intergovernmental commission, the two parties considered Saudi Arabia as a potential host of GLONASS ground stations.

"The sides expressed their readiness to continue consultations on prospects and mutually beneficial areas of bilateral activities in space sector: satellite navigation and installation of GLONASS ground stations in Saudi Arabia," the final document from the meeting read. 

Earlier this year, Roscosmos chief Dmitry Rogozin announced that Russia and Saudi Arabia had set up a space cooperation program. As part of the program, the parties have already discussed the possibility of Russia sending a Saudi astronaut to space for a short- duration flight.

"The countries have expressed readiness to continue consultations on the prospects and mutually beneficial areas of bilateral space activities ... a manned space flight and preparations for a short- duration flight of a Saudi astronaut," the protocol from the meeting read. 

Roscosmos is also considering Saudi Arabia, along with the United Arab Emirates and Bahrain, as a location for where to potentially deploy an optical station of an automated warning system that tracks dangerous situations in near-Earth space, the operation of which would be conducted by both countries in question.