In visiting the Kingdom Mr. Rosenshield sought to deepen his understanding of commercial and other issues relevant to his work, and to align U.S. government policy towards the Kingdom and the region with U.S. Embassy perspectives.
Mr. Rosenshield noted the timely and critical importance of current local and regional developments to Washington policymakers, most notably:
- the war in Yemen;
- ISIS/ISIL/Daesh in Iraq and Syria;
- security concerns in the Eastern Province; plunging oil revenues;
- regime succession, and the transition to a new generation of leadership; and
- concerns about threats from Iran, and the U.S. relationship with that country.
The U.S. will continue to cement and bolster its long-standing strategic relationship with the Kingdom, while balancing security needs with human rights concerns.
He agreed that the recent ISIL attacks in Paris would be “game-changing,” coming as they do on top of tensions in the increasingly global war against ISIL and heightened by the refugee crisis.
The Kingdom’s attention is most focused currently on the war in Yemen, an unprecedented military initiative. The Kingdom remains the largest GCC economy and market, and the key player/influencer. The common challenges in Yemen and ISIL have served to unify the GCC. Saudi Arabia also currently chairs the United Nations Counter-ISIL Finance Group.
U.S. policy aims among other objectives to maintain and ensure a stable environment in the Kingdom, safe for conducting business.
The following questions and concerns were discussed:
5-year Saudi Visit Visas
Once the norm (following a reciprocity agreement negotiated by Ambassador Ford Fraker) and more recently the exception, these are critical to the U.S. business community, and an important issue for discussion by Mr. Rosenshield with his Saudi counterparts.
Falling Oil Prices and Yemen War
The war will be protracted, with no clear exit strategy. Recent successes may lead to political negotiations. Low oil prices may compel the Kingdom to diversify its economy, and otherwise spur positive changes.
Trade and Investment Barriers
Challenges of doing business in the Kingdom have increased, as reflected in the erosion in the Kingdom’s rankings in the World Bank Ease of Doing Business Index. King Salman sought to ameliorate these concerns in the course of his recent visit to Washington. A series of events including the first ever Gulf Competiveness Forum to be held in Riyadh is planned for March 22-23, 2016, to engage the Kingdom on economic issues and facilitate honest and open dialogue on Saudi economic issues.
Corporate banking sector concerns were discussed, in the context of reduced liquidity for local projects and a consequent decline in economic activity generally as government borrowing crowds out the private sector.
The healthcare sector was identified as a particularly strong opportunity for American providers, with opportunities to leverage the strong U.S. brand with “Mayo Clinic” quality care; E-Health and IT software solutions to improve the doctor and patient experience; and the vaccine program to counter Corona/MERS virus.
U.S. Tax Issues
Questions were raised regarding the reported 200,000 Saudi citizens holding U.S. passports, and their tax obligations in the context of FATCA reporting by Saudi banks.
As Saudi energy consumption is projected to increase 10% or more annually, doubling every five years, U.S. technology, goods and services could help diversify energy inputs, including solar, wind and nuclear resources.
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