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INTERNATIONAL > Middle East

Saudi Arabia plans economic zones to court Japan Inc.

  • March 13, 2017
  • , Nikkei Asian Review
  • English Press
TOKYO — The leaders of Japan and Saudi Arabia appear set to agree on a “Japan-Saudi Vision 2030” collaboration to improve economic ties, with special economic zones in the Middle Eastern country serving as a centerpiece of the program.

 

Saudi King Salman bin Abdulaziz Al Saud arrived Sunday in Japan, and he meets Monday with Prime Minister Shinzo Abe. Saudi Arabia wants to realign its economy to overcome dependence on petroleum. Japan would support the effort by offering expertise in fields such as health care, investment and financial services. 

 

Areas in the desert country designated as special economic zones will offer tax benefits, fewer regulations and simplified customs processing. An automotive economic zone, for example, may waive tariffs on parts shipped from Japan. The Saudis may offer power grid development and educational facilities at the sites as part of the package. Toyota Motor is among those expected to support the initiative.

 

Japan and Saudi Arabia each will send three experts to the other country to help select the locations of these zones, considering the requests of the Saudi government and Japanese companies.

 

An investment forum scheduled Tuesday is expected to yield an agreement on private-sector collaboration. The Tokyo Stock Exchange will form a study group to pursue the listing of Saudi Arabian Oil — the world’s largest oil company — better known as Saudi Aramco.

 

Japan’s JX Holdings energy group and engineering company JGC will work with Saudi Aramco to develop petroleum and gas technologies. The Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corp. — Japan’s megabanks — will share information with the Saudi Arabian General Investment Authority to promote Japanese investment in Saudi Arabia.

 

About 30 projects involving both the private and public sectors will be pursued. Visa requirements between the two countries may be eased as well.

 

Deputy Crown Prince Mohammed bin Salman, the king’s son, has been leading efforts to develop industry and infrastructure that can ease the Saudi government’s dependence on oil-related revenue. Saudi Arabia, where half of the population is younger than 25, offers Japan an attractive growth market.

 

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