Prince Sultan's Visit Reflects Close Saudi-U.S. Relationship

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As part of the ongoing exchanges between senior Saudi and U.S. officials, Second Deputy Prime Minister, Minister of Defense and Aviation and Inspector-General Prince Sultan Ibn Abdul Aziz visited the United States in November 1999. The visit came in the wake of previous ones to the United States in September 1998 by Crown Prince Abdullah Ibn Abdul Aziz, Deputy Prime Minister and Commander of the National Guard, and those made by Prince Sultan in 1995 and 1997. On the U.S. side, President Bill Clinton flew to Saudi Arabia in 1994 and Vice President Al Gore was there in 1995 and 1998.

These visits have provided unique opportunities to continue high-level, face-to-face discussions on a wide range of topics, from enhanced trade and economic relations to closer cooperation to solve regional and international crises. They have contributed to maintaining the close ties that have existed between the two nations since the meeting of King Abdul Aziz Ibn Abdul Rahman Al-Saud, the founder of the modern Kingdom of Saudi Arabia, and President Franklin D. Roosevelt in the Great Bitter Lake of the Suez Canal in 1945. These ties have not only been beneficial to the peoples of the two countries, but have also contributed to security and stability in the Arabian Gulf region and beyond.

Speaking at a reception hosted in his honor by U.S. Secretary of Defense William Cohen on November 1, Prince Sultan said the special relationship that exists between the two nations in the spheres of politics, economics, trade, the military and security matters today is the result of the determined efforts of successive Saudi and American leaders to continue to strengthen bilateral ties, which are built on mutual respect and aim to benefit not only the two peoples, but humanity as a whole.

The latest official exchange involved a series of meetings from November 1 through November 4 between Prince Sultan and President Clinton, Secretary of State Madeleine Albright, Secretary of Defense Cohen and U.S. business leaders. At the White House, Prince Sultan, accompanied by Minister of Foreign Affairs Prince Saud Al-Faisal and Saudi Arabian Ambassador to the United States Prince Bandar Ibn Sultan Ibn Abdul Aziz, conveyed to President Clinton the greetings of the Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz, Crown Prince Abdullah and the citizens of the Kingdom.

Speaking to the media after the White House meeting, Prince Sultan said the talks focused on the close relations between the two countries and ways of attaining optimum cooperation between the two countries. The meeting, which was also attended by Secretary of State Albright and U.S. Ambassador to Saudi Arabia Wyche Fowler, was also a forum for bringing up issues of interest to the two sides. One issue of particular concern for the two countries is the Middle East peace process and efforts that can be undertaken to resolve the crisis through negotiations.

Prince Sultan said President Clinton had briefed him on the progress made to bring the Palestinians, Lebanese and Syrians to the negotiating table with the Israelis. He said President Clinton had expressed optimism and support for the peace process on all tracks. Prince Sultan reiterated the Kingdom's inalienable stance in recognizing the rights of the Palestinian people in line with the resolutions adopted by the United Nations Security Council.

Prince Sultan also met separately with Secretary Cohen at the Pentagon. Speaking at a press conference after the meeting, he declared that Saudi Arabia is against proliferation of weapons of mass destruction and has been calling for the Middle East in particular to be free of them.

Addressing a reception held in his honor by the U.S.-Saudi Arabian Business Council, Prince Sultan referred to the steps taken by Saudi Arabia the previous month to encourage greater investments by Saudi and non-Saudi businesses and individuals in the continued development of the national economy. The private sector, he said, now has a leading role in services such as education, health, communications, transportation and shipping, in addition to its traditional domains of trade and industry. He also drew attention to the upgrading of the regulations concerning foreign investment in the Kingdom, including a revised taxation system and the opening of property ownership to non-Saudis, saying these steps will provide greater opportunities for the private sector.

"The Kingdom of Saudi Arabia, like many other countries, has, over the past decade, gone through difficult economic conditions due to the developments in the oil market," he told the large number of U.S. and Saudi business leaders at the reception. "In spite of all the difficulties we encountered, our economy proved its durability and ability to withstand these pressures, thereby restoring trust and maintaining confidence in it. Rather than hindering our course of development, these difficulties motivated us to take and adopt new economic policies based on our experiences and on the lessons learned from our mistakes. We have also taken into consideration the impact of the challenges of globalization and the demands of today's world trade."

In this context, Prince Sultan said the Kingdom has worked hard and diligently to develop productive structures and to build a favorable base in order to vitalize the free-market mechanism. To achieve this objective, the Saudi government has taken a series of steps. The first involves the private sector and efforts to expand the diversity and scope of its activities. "The private sector will play a major and growing role on the basis of the Kingdom's increasing conviction that privatization is the ideal means toward achieving greater economic and operational competence in the production sectors, as well as providing the necessary services and assuring reduction in government expenditure," he said. "The resulting growth in its turn will attract foreign investment with its technology, as well as encourage domestic savings and propel the process of development and modernization. This policy is based on the private sector bearing the responsibility of fulfilling many of the development needs, for example participating in the implementation of the important projects that relate to vital sectors such as health, education, communications and shipping. This would allow the private sector to free itself from its traditional role, which was limited to the fields of trade and industry."

He explained that Saudi Arabia is aware of the need to work toward the removal of whatever stands in the way of investment in the form of obstacles and obstructions. To achieve that end, the government is currently modernizing its policies of trade, investment and taxation to improve the environment for investment and create suitable and attractive economic conditions. "Moreover, the Kingdom is keenly pursuing the establishment of solid, effective relations with its partners on the basis of openness and parity in the pursuit of mutual benefits. Mutual dependence and equitability will be bases of these relations."

Prince Sultan said that in an effort to encourage foreign investment and eliminate prevailing obstacles, Saudi Arabia is introducing a new taxation system for foreign capital. "In order to promote and enhance this step, it has therefore recently been decided to overhaul the system of sponsorship to meet the requirements of the current situation and achieve flexibility and transparency and secure the rights of all parties," he added. "The intention now is to amend the system to allow non-Saudis to acquire property and to make it responsive to the aspirations of the domestic market, in conformity with the principle of supply and demand, which is the backbone of a free economy."

Among the other important reforms that have recently been adopted and which will have a positive effect on economic and investment activities is the establishment of the Higher Economic Council. Prince Sultan said its objectives are to enable the private sector to acquire certain government institutions. "This is bound to reflect positively on opportunities for and the scope of foreign investment. In fact, the establishment of this council indicates the Kingdom's desire to prepare the national economy to enter the 21st century with competence and steadfastness through developing viable means and strategies for the management of economic affairs. It will also expedite the decision-making process and its efficacy. This will integrate and coordinate the links between concerned departments to promote the ability to interact smoothly and efficiently with the changes in the global economy."

Prince Sultan added that the Higher Economic Council will also review the structural reforms needed by the national economy to enhance its effectiveness and ability to compete, including the final review of the rules and regulations that govern foreign investment.

A joint Saudi-U.S. statement issued the day after Prince Sultan's departure on November 4 said his visit "reflects the desire of both governments to have regular high-level consultations to assure coordination of policies that affect mutual interests." It said the two sides discussed topics of mutual interest and concern, including the close cooperation of the two governments, particularly in military and economic affairs.

The statement said the two countries had agreed that continuing high-level military contact and joint military training will further enhance preparedness and help sustain security and peace in the Middle East and throughout the world. The two countries pledged to continue to work together to promote peace and prosperity in the region and throughout the world.

The joint statement said Saudi Arabia and the United States agreed on the need to continue to consult closely on the state of the international economy and to continue cooperation to enhance bilateral trade and investment. "Both sides reiterated their desire to support and broaden the economic partnership between the private sector in the two countries and to remove obstructions to the development and flow of trade between the two countries and to facilitate the entry of their products into the market of the other...[and] to initiate discussions on an agreement that encourages and protects investment in the two countries."

The United States expressed its support for Saudi Arabia's accession to the World Trade Organization (WTO), and both sides looked forward to increasing trade opportunities and further integration into the global economy, which will flow from Saudi Arabia's membership of that organization. Both sides agreed to continue their efforts to complete these important economic negotiations as soon as possible. The United States also welcomed continued Saudi efforts to enforce measures for protecting intellectual property rights and looked forward to further progress.

Saudi Arabia and the United States renewed their intentions to consult fully and cooperate on the issues related to global climate change and will continue to assure that measures taken in this regard are based on the state of scientific evidence and data. They stressed the need to encourage technical cooperation and scientific research in the fields of water; agricultural standards, regulations and policies; and specification and measurements.

The joint statement reiterated the vital and strategic importance of Saudi Arabia in the world oil market, and the United States emphasized its recognition of the Kingdom as a secure and reliable supplier of energy resources, especially to the United States.

On the political scene, the two countries pledged to cooperate fully in continuing efforts to secure a comprehensive, just and lasting peace in the Middle East based on United Nations Security Council Resolutions 242 and 338, the principle of land for peace and the results of the Madrid Conference. The statement said President Clinton briefed Prince Sultan on his meetings with Israeli Prime Minister Ehud Barak and Palestinian President Yasser Arafat in Oslo, Norway. It added that the two sides also discussed efforts to reinvigorate the Syrian and Lebanese tracks of the peace process, as well as the multilateral track. Both sides expressed hope for rapid progress toward the goal of comprehensive peace.

During their discussions on Iraq, the two sides agreed the regime in Baghdad must comply with its obligations under the relevant resolutions, and that the British/Dutch draft resolution on Iraq, then under consideration by the UN Security Council, provided the best means of enhancing humanitarian assistance for the Iraqi people and containing the threat posed by the Iraqi regime. They agreed that Iraq continues to constitute a standing threat to peace and stability in the Arabian Gulf region and expressed their shared concern that Iraq's actions continue to cause suffering among its people. They also agreed the Gulf region would never be truly secure as long as Saddam Hussein remains in power in Iraq.

Turning to the threat of terrorism to international security and stability, the statement said the two countries underscored the importance of concerted international action. It said the United States and Saudi Arabia reaffirmed their pledge to work together to defeat the scourge of terrorism in the region and around the world. They called on all countries to prevent terrorists from operating from their soil, and to assist in bringing known terrorists to justice and, in so doing, both countries supported all relevant UN resolutions.

The statement ended by emphasizing that both Saudi Arabia and the United States agreed that it is not appropriate to link Islam to terrorist acts. Prince Sultan's visit provided a venue for Saudi Arabia and the United States to renew the close relationship they have enjoyed for more than half a century and to chart the course for cooperation in the new century. {short description of image}

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