During my recent meeting and discussions, the Japanese Consul in Saudi Arabia asked me, “Do you know what makes Japan’s presence in Saudi Arabia a great pleasure?” “It is not the trade or sales of our brands Toyota, Sony, Bridgestone or other popular Japanese brands known to the Saudi consumer, but it is the presence of 14 Japanese restaurants serving Sushi, Sashimi and other seafood dishes in the Saudi capital, Riyadh.
This signifies our presence not only from the economic or commercial perspective but also the non-economic and cultural areas which is admired by the Saudi society and expat communities as well.” Saudi Arabia and Japan have a long history of successful relationship in investment and trade exchange. Japanese products enjoy a respectable position and appreciation in many fields for a long period of time.
Japan’s strong presence in the oil sector in Saudi Arabia through its oil company that operated in the neutral zone between Saudi Arabia and Kuwait is well-known. It enjoyed exploration concessions in the region and its experience in this field was a successful one. Also, Japan dealt in the commercial banking sector in partnership with one of the licensed banks in Saudi Arabia.
Strategic investment policy
Japan has now directed its “strategic” investment policy with Saudi Arabia to increase its volume of cooperation with the Kingdom. It is one of the most important customers of Saudi Arabia for oil and it also seeks to be a remarkable and dynamic partner playing a vital role in Saudi economy. Japan is also keen to have a stake in Aramco investment.
Japan is anxiously and curiously watching the developments in both China and South Korea as far as their investment policies with Saudi Arabia are concerned, as it is eminent that all these three countries are competing vigorously against each other.
Saudi Arabia has recognized that the world is changing and this is why it has shifted its concentration toward Asia. This is not a temporary policy but a strategic decision which reflects a new economic realityHussein Shobokshi
Japan has had a successful run with Saudi companies even outside its geographical investment areas. They have been collaborating with Abdul Latif Jameel Company to market their cars for a long period of time outside Saudi Arabia and in the commercial insurance sector as well.
There are other models of business in the same context. It has partnered with Saudi institutes in the field of training and technical curriculum for Saudi youth in a limited way but plans to expand it because of the competitive advantage of the large and popular admiration for Japan’s experience in management.
It also wants to establish its presence in the Red Sea business by investing in the economic city in Jazan, keeping an eye toward the African continent, just like China’s penetration into that region.
Visit to Japan
Custodian of the Two Holy Mosques King Salman Bin Abdul Aziz’s visit to Japan has reaffirmed Saudi Arabia’s political and economic focus toward the East and he is committed to this as it was revealed during his recent mission to Japan. It is believed that the economically strong states in East Asia will determine the next era of investment in Saudi Arabia.
Saudi Arabia’s new trend of relationship with major Asian countries, namely China, Japan, South Korea, India and Indonesia comes at the expense of European countries, as Europe’s isolation is reflected due to their internal affairs and deteriorating condition of their economies.
Saudi Arabia has recognized that the world is changing and this is the reason that it has shifted its concentration toward Asia. This is not a temporary policy but it is a strategic decision taken at all levels and therefore this is a new economic reality with new rules and different players in the game.
This article was first published in the Saudi Gazette on March 20, 2016.
Hussein Shobokshi is a Businessman and prominent columnist. Shobokshi hosts the weekly current affairs program Al Takreer on Al Arabiya, and in 1995, he was chosen as one of the "Global Leaders for Tomorrow" by the World Economic Forum. He received his B.A. in Political Science and Management from the University of Tulsa. His twitter handle is @husseinshoboksh.