Saudi-US trade relationship moving toward knowledge-based economy: Steve Lutes

Through Anas Aliusuf

JEDDAH – Trade relations between Saudi Arabia and the United States are moving toward a knowledge-based economy and the digital space, said Steve Lutes, vice president of Middle East affairs at the US Chamber of Commerce.

Speaking to the Saudi Gazette, Lutes called the idea of ​​limiting the Riyadh-Washington business relationship to oil, energy and defense as outdated thinking.

“Today it’s all about the creative industries. We see tremendous opportunities in the digital economy,” said Lutes.

But he added, “Historically, the relationship has been, and will continue to be, centered on oil, energy and defense.”

The American business official, who recently completed his first visit to the kingdom since the pandemic alongside a US Chamber of Commerce delegation, hoped the trip would “refresh ties with Saudi officials.”

During the visit, Lutes and his colleagues met with a variety of Saudi officials, including key ministers from trade, energy and industry to health and more.

“We focused our meeting on a range of officials who have different responsibilities in relation to the digital economy as the kingdom is a young and early adopter of technology and very talented and literate when it comes to the creative ecosystem. I think there’s tremendous opportunity for American companies for anything digital,” Lutes said.

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He said: “The number of American companies investing in Saudi Arabia is significant and growing. And we’re trying our best to make more businesses aware of what’s happening in the Kingdom.”

He pointed out that part of the challenge in raising American business awareness of opportunities in the Kingdom is the size of the US.

“Efforts must be made to educate American businesses about the opportunities in the kingdom. Part of the challenge is getting businesses to understand the changing economy in the Kingdom.”

COVID has gained momentum

Lutes said because the Saudi government has embraced digital transformation quickly, engagement has increased during the pandemic.

“One of the things that has come out productively from the pandemic while we continue to come in person is that we’re able to hold meetings and discussions virtually so we don’t lose momentum, and in fact we’ve increased momentum as we’re quickly getting a meeting have been able to address issues,” he added.

Saudi green initiatives

Lutes met with Adel Al-Jubeir, Saudi Arabia’s climate chief. “It was a productive meeting,” said Lutes.

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“For us, Al-Jubeir was the ambassador in Washington and he has a deep understanding of our country and he knows the potential for US business to go hand-in-hand with the Saudi Green Initiative and the Middle East Green Initiative,” said the American official.

He added: “One of the pillars of our economic relationship has been the energy sector, the question is how we can expand it and take advantage of the new opportunities presented by the global energy transition.

“Saudi Arabia is investing in renewable energy and a circular carbon economy. And we focus on US companies that are aware of and participating in the opportunities of the Saudi green plan. We want to bring new companies to the table so they can take advantage of these opportunities.

“At the US Chamber, in light of COP26 in Egypt, we are focusing on the role of the private sector in advancing climate solutions. Governments set net-zero targets, programs and initiatives, but it is private sector companies that implement them.”

Regional Headquarters Initiative

Referring to the Saudi Arabia regional headquarters’ initiative, Lutes said the initiative is important.

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“The Saudi Ministry of Investment is doing a lot to promote all activities in the kingdom and be part of the economic transformation.

“Businesses will respond positively as they provide incentives while also promoting the environment, and when reforms take place these things will encourage businesses to come here and set up their businesses and show their regional presence.”

Engaged Business World

Lutes pointed to what he described as one of the least told stories about change in the new Saudi – “the government’s approach to involving the business community in the decision-making process.”

He said: “The government is coming to the business community and asking to be part of the regulatory process and to understand how this will affect the business and investment decision.

“They proactively come into the business world and make it part of the decision-making process that is revolutionary, productive and has had a huge impact on businesses. Advising companies and getting them involved makes a big difference.”

Regarding future plans, he said, “We are focused on bringing a delegation of GreenTech US companies to the Kingdom in 2023, and we aim to visit more Saudi cities.”

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