46 Memoranda of Understanding between Saudi Arabia and the USA in 13 sectors worth $400 billion
As part of its quest to achieve Vision 2030, the Saudi government has set up an economic program to partner with the world's most important economic powers and has identified 10 key sectors for investment with the United States, including defense, aviation, energy, petrochemicals, technology, manufacturing, oil and gas, Mining, investment, and health.
The identification of these sectors, based on the economic priorities of the government sector and the private sector, and their alignment in a follow-up and measurement economic program has been agreed with the US Administration to ensure the speed of delivery and provide the necessary means to achieve it.
The number of jobs generated by the joint investments in the ten sectors Between Saudi Arabia and the US is around 750 thousand jobs in both countries, and investments exceeding 400 billion US dollars between the two sides.
- In order to build local military manufacturing capabilities, five memoranda worth $ 18.5 billion have been signed between Saudi Military Industries Company (SAMI) and Aviation Technology Company with a number of major US companies (Raytheon, Boeing, Lockheed Martin, General Dynamics) With the aim to develop aircrafts, warships and vehicles systems, and assembling and manufacturing Black Hawk helicopters with a domestic content of not less than 50 per cent.
- In terms of investments in the technology sector, the value of memorandums of cooperation signed between the Kingdom and the US reached $ 5 billion, including two memorandums of understanding signed between the government and Microsoft and Cisco to contribute to the Kingdom's digital transformation plan through knowledge transfer and acquisition of related advanced systems, While four memorandums were signed between a number of Saudi companies.
- In the field of petrochemicals, the signed memoranda is worth $ 72 billion, with the aim of studying the establishment of a silicon industry between the Royal Commission of Jubail and Yanba' with DOW, which will invest directly in the manufacture of polycrystalline acetate in the Kingdom. SABIC and EXXON have also agreed to establish a joint ethylene production plant using shale oil in the United States, furthering SABIC's strategy and expansion.
- The total value of investments in the oil and gas sector reached $ 54 billion. Eight memorandums of understanding were signed between "Aramco" and a number of American companies such as Halliburton and Schlumberger, among others, as part of the program to increase local content in the company's business, and to localise the Saudi power supply chain over the next five years.
- Aramco has signed two memorandums of understanding with Emerson Jacobs to enhance the company's project management capabilities and to benefit from the Fourth Industrial Revolution's applications in improving its business efficiency and production. Aramco has also signed four memorandums of understanding with a number of US companies in the field of manufacturing petroleum platforms, enhancing ground drilling , strengthening of the logistics and design of marine platforms.
- The investment sector contains only two memoranda of understanding, but with a value of up to $ 160 billion. A technology fund was established between the Public Investment Fund and Softbank. The Public Investment Fund's contribution amounts to $ 45 billion dollars out of the $ 100 billion target (it is already at $93 billion after one year of its establishment..). The Fund has achieved a profit of US $ 3 billion within five months. The Kingdom will have 45% of these profits and the same percentage of each future return. The second memorandum of understanding was the establishment of an investment fund in the US infrastructure by the Saudi Public Investment Fund and other major international investment funds.. As well as the joint investment of up to $ 60 billion which contributes to the Fund's strategy of diversifying investments and achieving returns.
The Saudi share will not be announced in this fund, but it is expected to be not less than a quarter or half. At least $ 45 billion dollars are added to this fund. Thus, Saudi Arabia will spend $ 60 or $ 75 billion in the field of investments as a minimum. Thus, defense, investment and petrochemical sectors constitute $ 260 or $ 275 billion of the total deal.
- The defense, investment, petrochemical, oil and gas sectors will account for $ 314 or $ 329 billion of the total value of the deal and the remaining amounts (from $ 71 to $ 86 billion) will be distributed on the mining, technology, health, energy and aviation sectors.
These investments are well thought over..There will be several returns, where the technology will be localised along with the transfer of scientific and applied knowledge to Saudi Arabia..this benefit represents the most important and priceless return..There is also a long-term return on investments, as investments are a very profitable option and the capital will return after some years with annual and monthly profits..which will bring billions of dollars to the state treasury and insures some authority and a foothold in many international companies and successful projects.. with the other benefit of obtaining military and civilian technologies.. These benefits alone exceed the money paid ..and there are also the thousands of jobs that will be created from these investments and projects.
*This is what has been achieved so far during this period of MBS visit to the US.. there is still another week to the visit..
These agreements will be accompanied by an American commitment to invest in the Kingdom, both in terms of material and technical investments, for example the deal of $ 110 billion will see a quarter or half of it within the Kingdom where US companies will be obliged to invest in Saudi companies or Saudi infrastructure or Saudi projects, this is part of a wide spectrum to achieve the Saudi 2030 Vision, and now KSA has drawn broad points and details with the United States and Britain.. it is expected that the Saudi Prince MBS visit to France soon will be in the same line..we may also see similar steps with Italy, China, Japan and South Korea.
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