The 2nd Saudi French Business Opportunities Forum, a two-day event held in Riyadh, wrapped up on Tuesday with big news. French P.M. Manuel Valls announced that 10 billion euros ($11.4 billion) in contracts had been signed — an amount roughly equal the two countries’ bilateral trade volume this year. The deals cover defense, energy, health, satellites, infrastructure, and food, including the lifting of a 15-year-old Saudi ban on French beef. According to a report by local TV station Al-Arabiya, the agreements also entail the establishment of a $2.3 billion Saudi investment fund, a maritime research center, and an industrial complex in France.
The two countries already enjoy strong economic ties, and this new slew of deals will bolster their relationship further. Saudi Arabia is the largest oil supplier to France, while some 4,000 French firms export to the kingdom; currently about 80 French companies are operating there. Prior to the forum (attended by some 200 French companies), the volume of French investments in Saudi Arabia exceeded $19.7 billion across 207 projects, including joint ventures.
One of the highest priorities for both sides is Riyadh’s defense and armaments purchases — for Saudi national security on one hand, and French export-fueled economic growth on the other. One key agreement was a Saudi order for 30 patrol boats, and the kingdom has expressed interest in purchasing flexible assault ships like the Mistral helicopter carriers France recently sold to Egypt. Riyadh is also considering the purchase of 4 French-Italian FREMM (European Multi-Mission Frigate) vessels.
The forum in Riyadh built upon recent momentum over the last few months. During Deputy Crown Prince and Defense Minister Mohammed bin Salman’s trip to Paris in June, the two governments signed contracts worth $12 billion, including the sale of 23 Airbus helicopters, and agreed to undertake feasibility studies for the construction of two Areva nuclear reactors. Then in August, French firm Couach agreed to build 79 marine interceptors as part of a larger naval-equipment deal between the two countries.
And France’s arms export industry is booming, including but not limited to Saudi Arabia. Within the last year, multi-billion dollar sales to Egypt, Qatar, and India have been clinched. According to the French Defense Ministry, the arms deals struck in 2015 up until May created close to 30,000 new French jobs. It is one of the few bright spots in the French economy, although the country’s record arms exports have drawn criticism about contributing to human rights abuses and fueling war in the Middle East.
Last year, Saudi Arabia surpassed India to become the world’s top arms importer, increasing its spending by 54% to $6.5 billion, according to industry analyst IHS. Riyadh is worried that the U.S., its traditional defense partner, is reducing its commitment to Saudi Arabia’s security, as evidenced by the nuclear deal with Riyadh’s regional archrival Iran. So the expansion of ties with France is part of a Saudi effort to build alliances beyond the U.S.
And intensifying turmoil in the Middle East means wealthy Saudi Arabia will be a big customer for France throughout the foreseeable future.