PARIS — Saudi Arabia “no longer wants to be an oil country” and wants “a diversified and innovative economy,” and France is keen to collaborate with the Gulf country to achieve its aims, former French foreign minister Jean-Yves Le Drian said Tuesday.
Speaking at the Vision Golfe summit in Paris, Le Drian, who was speaking in his capacity as president of the French Agency for AlUla Development, said that Saudi Arabia’s Vision 2030 agenda presented opportunities for French companies. Al-Ula is a tourism project in Saudi Arabia's Medina province with a number of major archaeological sites, including the UNESCO World Heritage-listed Nabataean city of Hegra. Vision Golfe is an annual event held by Business France at the French Ministry of Economy and Finance that aims to strengthen business ties between France and the Gulf countries.
Introduced by Saudi Crown Prince Mohammed bin Salman in 2016, Vision 2030 is the program to diversify the kingdom’s economy away from a reliance on oil by investing heavily in other sectors, including culture, clean energy, entertainment, sports, technology and tourism.
Le Drian, who was France's top diplomat between 2017 and 2022 under President Emmanuel Macron, said that Saudi Arabia “no longer wants to be an oil country” and wants “a diversified and innovative economy” and the kingdom has been moving toward these goals with wide-ranging reforms in employment, education and infrastructure. He also noted the efforts carried out by Saudi authorities since 2021 to attract foreign direct investment and international companies to establish regional headquarters there. The reforms include the kingdom introducing tax incentives in December 2023 for multinationals to move their regional headquarters to the kingdom, including a 30-year exemption on corporate income tax and withholding tax related to headquarters activities.
“Today as part of our responsibilities as well as the ones I used to have in several governments in the last few years, I pay attention and make sure France is supporting this movement,” Le Drian said.
In March, figures released by the Saudi Ministry of Economy and Planning confirmed that the kingdom’s non-oil revenues reached 50% of the country’s gross domestic product for 2023, amounting to 1.7 trillion riyals ($453 billion) driven by a steady growth in arts and entertainment, food and retail, transport, health and education.
Al-Ula French connection
Al-Ula is a significant part of the Vision 2030 plans. It is an ancient city and area in northern Saudi Arabia that will become the kingdom’s cultural capital.
In 2018, France and Saudi Arabia signed an intergovernmental agreement to develop the region, drawing on French expertise in culture and history.
Some 120 French archaeologists are working on the seven excavation sites in the ancient city with their Saudi counterparts, Le Drian said.
“I’m convinced and so is our President Emmanuel Macron and the Crown Prince to support a partnership project between our two countries for the sustainable development of Al-Ula,” Le Drian said, before citing a partnership signed in March 2023 by the Paris-based gallery Centre Pompidou and the Royal Commission for Al-Ula to develop a contemporary art museum in the ancient Saudi region.
The minister emphasized that the city’s current 55,0000 inhabitants are and will remain a part of the Al-Ula project, and authorities want to create 40,000 jobs as part of the project and want the locals to be involved in the project.
He said that authorities are looking to create 8,500 hotels there by 2045, including a training school for hospitality jobs and catering.
Regional instability
Despite the economic interest in the region, the war in the Gaza Strip between Hamas and Israel has increased uncertainty for foreign investors and led to fears that oil prices could surge if the eight-month conflict escalates.
Le Drian said that despite the current conflict in the Middle East, the Gulf countries “play a significant part for the future and stability of the region.” He added that France is “always standing by its Gulf allies to ensure stability and economic development.”
“By 2030 … France wants to remain a friend and frontline partner, we want to be a talent catalyzer to boost our co-operation in the Middle East and in particular Saudi Arabia," Le Drian concluded.
Trade between France and Saudi Arabia came to nearly $12 billion in 2022, a growth of 47% compared with 2021.
