Future of Saudi-Iran economic collaboration after deal

A few days after the signing of an agreement between Iran and Saudi Arabia to reopen embassies, the kingdom’s Finance Minister Mohammed al-Jadaan said that his country could soon be investing in the Islamic Republic.

Asked by in Riyadh how soon the world might see the Saudi kingdom making significant investments into Iran and vice versa, al-Jadaan replied: “I would say very quickly.”

“Iran is our neighbor, and has been and will continue to be for hundreds of years,” al-Jadaan said. “So I don’t see any issue that would prevent normalization of the relationship, cross-investments etc.”

The countries additionally agreed that previous cooperation accords — namely a “Security Cooperation Agreement” from 2001 and a “General Agreement for Cooperation” from 1998 covering the fields of trade, economy, sports, technology, science, culture, sports and youth — would be revived.

Tehran’s regional strategy is focused on energy and trade interconnectivity with immediate neighbors. The security aspects of this strategy has been articulated in the so-called Hormuz Peace Endeavor (HOPE).

Saudi Arabia is launching trillions of dollars worth of mega-projects as part of the kingdom’s Vision 2030 plan to diversity away from oil. Iran, whose economy has been under years of Western sanctions, is also trying to diversify its economy.

Al-Jadaan said that there are a lot of opportunities for Saudi investments in Iran. Observers say this is an important indication of underlying political will at the highest level in Saudi Arabia.  

According Amwaj.media, a website covering Iran, Iraq and the countries of the Arabian Peninsula, the initial wave of investments could take shape in non-sanctioned industries, such as food and pharmaceuticals, followed by other sectors where creative banking and financial solutions would be put in place.

ME