Multi-Billion Dollar Contracts Between the U.S. and Saudi Arabia

American and Saudi companies have signed commercial contracts worth tens of billions of dollars. These contracts were signed on Saturday, May 20, during the visit of Donald Trump, the President of the United States, to Riyadh, to assist Saudi Arabia in its program to develop a non-oil economy. According to Reuters, Saudi Aramco, the national oil company of Saudi Arabia, announced that it has signed agreements worth $50 billion with American companies. Khalid Al-Falih, the Saudi Minister of Energy, stated that the total value of the contracts exceeds $200 billion, with many related to the production of equipment that Saudi Arabia previously imported. Some contracts had been announced earlier, while others were memorandums of understanding that require further negotiations to be executed. According to Reuters, these contracts reflect Saudi Arabia's eagerness to attract foreign investment and technology to reduce its dependence on oil exports. The low oil prices in recent years have slowed the growth of the Saudi economy and left the government facing a severe budget deficit. Mr. Al-Falih, speaking at a conference with American business executives, said, 'We want foreign companies to see Saudi Arabia as a platform for exporting to other markets.' King Salman of Saudi Arabia traveled to various Asian countries in March of this year, and his accompanying delegation signed agreements worth tens of billions of dollars, including contracts worth $65 billion in China. Meanwhile, the Public Investment Fund, which is the largest investment fund in Saudi Arabia, and Blackstone, a U.S. private equity firm, announced they are studying a proposal to create a platform for $40 billion investment in infrastructure projects, mainly in the U.S. Based on this proposal, $20 billion will be withdrawn from the Public Investment Fund, and over $100 billion will be invested in infrastructure projects. This is a significant advantage for Mr. Trump's administration, which is seeking to rebuild America's weak infrastructure. At the same time, the world's largest private investment fund, backed by the Public Investment Fund, Japan's SoftBank Group, and other investors, including U.S. companies Apple and Qualcomm, announced on Saturday that they will invest over $93 billion in technology sectors, including artificial intelligence and robotics. The majority of the Japanese group's investment is likely to occur in the U.S., allowing Riyadh to access the technology needed for economic development. Key policymakers in Saudi Arabia's economy, including the Minister of Finance and the head of the National Development Fund, introduced investment opportunities in Saudi Arabia at this conference. Saudi officials announced they are preparing new and simplified regulations within the next 12 months to facilitate foreign direct investment. Among the contracts signed on Saturday was a $15 billion deal with General Electric (GE), which includes $7 billion in goods and services from the company covering the fields of energy, health, oil, gas, and mining. Saudi Arabia, one of the largest military equipment buyers in the world, is striving to develop its domestic arms industry instead of importing these supplies. The American aerospace and military equipment company, Lockheed Martin, has expressed readiness to assist in the production of nearly 150 'S-70' helicopters in Saudi Arabia.