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Hello and welcome to Business Daily from the BBC World Service with me, Sameer Hashmi. Today we are in Saudi Arabia, ahead of a visit from US President Donald Trump to this region.
For Saudi Arabia, Crump's visit is about strengthening ties with a long-standing Western ally, a relationship that grew strained during the Biden years. From a Saudi or Emirati point of view, success is keeping this president happy and on his good side. These are relationships that I think from Saudi Arabia, from the UAE, they want to just sort of keep things on calm waters and
and not have to delve into the more contentious and difficult issues within the region. For President Trump, it is about landing investment deals that can be framed as a win for his economic agenda. These will all be packaged in a manner that looks, you know, appropriate and will give the president confidence
The sort of headline that he needs. Again, he's looking for a headline of big investments in America, and he will get that. Saudi Arabia is moving hugely toward tech and IT solutions. And I would say that the tech sector in both countries is ripe for collaboration. So will the visit be a win-win for the U.S. and the Gulf? That's all coming up in today's Business Daily. It's the 20th of May, 2017.
The venue is Murabba Palace, one of the oldest and most historical palaces in Riyadh. Hundreds of Saudi men are performing the Ardha, the traditional sword dance. It's a powerful display of rhythm and heritage. Drumming, chanting and synchronized movement. And among them in a moment that made headlines around the world stands Donald Trump. Swaying gently with a sword in his hand, he stood shoulder to shoulder with the Saudis performing the Ardha.
This was the grand welcome he received on his first foreign trip as president. He broke with decades of tradition by choosing Saudi Arabia as his maiden foreign trip. Modern U.S. presidents typically visit Canada, Mexico, or the United Kingdom first. Now, eight years later... I can also confirm the dates of the president's trip to the Middle East. He will travel to Saudi Arabia, Qatar, and the United Arab Emirates from May 13th until May 16th.
Donald Trump will land in the Saudi capital, Riyadh, for a three-day tour of the Gulf on his first major overseas trip since returning to office. The US President will meet Saudi Arabia's Crown Prince and de facto ruler, Mohammed bin Salman. He will also attend a summit with regional leaders and heads of state, and then he is scheduled to travel to Qatar and the United Arab Emirates. For President Trump, the stakes are high. He is chasing fresh Gulf investments, particularly from the region's powerful sovereign wealth funds.
Back in January, Crown Prince Mohammed bin Salman pledged to invest $600 billion in the US economy over the next four years.
But Donald Trump is aiming higher, seeking deals that could total up to $1 trillion. And it's also reported today in the papers that Saudi Arabia will be investing at least $600 billion in America. But I'll be asking the crown prince, who's a fantastic guy, to round it out to around $1 trillion. I think they'll do that because we've been very good to them. So will the Saudis agree? And what could be announced during the visit?
I think what's different and what's important this time is that this administration is very focused on bilateral engagements, the deal-making. This is Karen Young, a leading Gulf expert at the Middle East Institute based in Washington, D.C.
It is the first foreign policy trip that the president is making. And it is a repeat of what he did in his first administration of visiting Saudi Arabia, but also now including other GCC states in this visit. So it's not a regional trip. It's not a trip that's meant to really make significant progress on regional crises, whether that's in Gaza or in Syria or even in Lebanon. I don't think he's there to ask for Gulf support on...
He's asked there, he'll be asking them for what they can do for the United States. So this is really about those investment pledges and about the ways that, you know, they can find synergies or meet mutual interests.
And so that's a real change of tack, I would say, from a foreign policy perspective of what traditionally U.S. presidents have seen as the role of Gulf financial intervention and support in the wider region. And then prioritizing, of course, this idea of America first. What's interesting is that Donald Trump has been very clear that he's expecting big investments from
from Saudi Arabia. I mean, there are talks that the Crown Prince has agreed to pledge about $600 million. Donald Trump is talking about $1 trillion. Yeah, I mean, these are very big numbers. You know, they're not really realistic in terms of what would flow in direct investment. This is also about arms purchases. It's about sort of long term strategic investment in the United States.
And so I would take it with a little bit of a grain of salt. But yes, he wants the announcement. He wants to have a big poster in a meeting that describes where these investments might go and some estimation of what they do in the American economy in terms of job creation or his big push, of course, on domestic manufacturing. And it's quite delicate because
investment of that size, particularly in what the US administration wants, which is support for critical energy infrastructure, whether that's in LNG, or pipelines, or port systems for export facilities, or perhaps even in nuclear technology for driving growth in data centers and AI. These are, you know, sensitive industries. And so one of the points of
in advance, and that's why Sheikh Tanoun was in Washington and also Khaldun Mubarak and other UAE officials, was to try to get some assurances that an Emirati investment would be very much a safe one and one that could be fast-tracked in terms of U.S. CFIUS review, so the congressional review that is making sure that any foreign investment in critical infrastructure of any kind is safe
is okay and with a partner that is, that is trusted because historically, and this is true in any country that having foreign investment in, you know, very sensitive infrastructure would be considered a risk. It's pretty clear what Trump wants from, from, from the strip. What about the Saudis and even the Emiratis for that matter? What are they expecting to gain out of the strip? What would success look like from the Saudis point of view, from the Emirati point of view, and even from Trump's point of view?
Well, I think from a Saudi or Emirati point of view, success is keeping this president happy and on his good side. And so it's quite easy to make commitments of investment. They have large sovereign wealth funds, which are already directing a lot of allocations into U.S. markets. The U.S. has critical technologies and assets, which are good investments from their sovereign wealth funds point of view.
So it's, I think, pretty straightforward from a Gulf state point of view. You make a commitment, make the president happy and that he can claim a win on his economic policy and then leave the difficult things sort of off the table. These are relationships that I think from Saudi Arabia, from the UAE, they want to just sort of keep things on calm waters.
and not have to delve into the more contentious and difficult issues within the region, on which there are some anxieties and I think real apprehension, including the negotiations ongoing with Iran. Defense will be high on the economic agenda during President Trump's visit to Riyadh.
According to reports, he is expected to offer the Saudis an arms deal worth over $100 billion that would include a range of weapons like transport aircraft, missiles and radar systems. The United States has been a long-standing arms supplier to Saudi Arabia, with President Trump offering weapons worth $110 billion during the first term.
But as of 2018, only 14.5 billion in arms sales had been initiated and those deals came under growing scrutiny in Congress following the murder of Saudi journalist Jamal Khashoggi. In 2021, the US Congress imposed a ban on the sale of offensive weapons to the kingdom, citing the murder and Saudi Arabia's role in the war in Yemen.
The Biden administration began easing its stance in 2022 as Russia's invasion of Ukraine disrupted global oil markets. By 2024, the ban was lifted, with Riyadh viewed as a crucial Washington partner in the post-war reconstruction of Gaza. Ali Shehabi is a Saudi political commentator and author with close ties to the government. I asked him what was Saudi Arabia's Crown Prince Mohammed bin Salman looking to get out of this trip.
I mean, you want to solidify the American-Saudi security relationship. It's already quite strong. There's a lot of cooperation. Saudi Arabia works very closely with Central Command, which is the U.S. Gulf military organization. And you want that, you know, fortified and solidified.
sort of solidified by this visit, which I think it will be. What do you mean when you say solidify? What would be the specifics, if you can give us some kind of... Well, it's a question of also having in place a more efficient procurement system, which allows the kingdom to get ammunition, for example, on an expedited basis.
to get access to more military equipment, to get access to more American assistance and advice. This is obviously an ongoing process, but its continued efficacy depends on the ongoing relationship with each current U.S. administration. So it's important that the visit of President Trump highlights that.
and confirms it and keeps it on a solid footing.
President Trump, of course, has set the agenda very clear what he's looking for from the Strip. He wants Saudi capital to come into the United States. But there are also concerns that given where oil prices are and there are budgetary challenges that Saudi Arabia is facing right now, that they may not be in a position to pledge such a huge amount, whether it's $600 billion or more, into the U.S. markets. Well, look, again, it's a question of packaging.
And the kingdom has a huge portfolio of existing investments in America and a pipeline of investments it intends to make in America in any event. So these will all be packaged in a manner that looks, you know, appropriate and will give the president the sort of headline that he needs. I think it will not be affected very much by the movement of oil prices at the moment.
And what is the kind of headline that the Saudis are looking for from this trip? No, it's more the headline that the president's looking for. Again, he's looking for a headline of big investments in America, and he will get that. You're listening to Business Daily from the BBC World Service. I'm Samir Hashmi in Saudi Arabia. And today, I'm looking at the relationship between this region and the United States as US President Donald Trump flies in for an official visit.
Nome. Nomo. It is... Neom. Neom. Neom. What did you say to me? It's Neom. What's Neom? A glimpse into Saudi Arabia's ambitious trillion-dollar futuristic zone, roughly the size of Belgium. There, in that corner of Saudi Arabia. Neom. Neom is the centerpiece of the kingdom's Vision 2030 strategy.
an economic diversification program to move the country away from its reliance on oil, as global demand for hydrocarbons is expected to fall in the coming decades.
As part of this strategy, the Saudi government is investing heavily in sectors like tourism, entertainment, mining and sports. But the country now faces twin challenges. First, oil prices have recently plunged to a four-year low, creating budget pressures that could slow down the momentum of these mega-projects. In fact, spending on several initiatives, including NEOM, has already been scaled back over the last year due to falling oil prices.
Second, foreign direct investment into Saudi Arabia fell for a third consecutive year in 2024, highlighting ongoing difficulties in attracting international capital. I'm standing outside the King Abdulaziz Convention Center here in Riyadh. This is the venue where the Saudi government will be organizing a major investment summit on the day President Trump arrives. It will be attended by ministers and chief executives from both the countries.
While much of the attention is on President Trump drawing Gulf capital into the U.S. economy, the Saudis will use this opportunity to attract American investments into the country. The U.S.-Saudi Business Council, an organization working closely with governments and private businesses in both countries, believes that President Trump's visit will help to shine a light on potential investment opportunities in Saudi Arabia for American firms.
Houtam Al-Jalal is the head of the Riyadh office. Saudi Arabia is moving hugely toward tech and IT solutions. And I would say that the tech sector in both countries is ripe for collaboration, focusing on areas such as AI, fintech and smart technologies.
There is also one sector that is booming and super expanding here in Saudi Arabia, which is entertainment and tourism. With Saudi Arabia's focus on becoming the global tourism hub, there is a substantial investment opportunities in, I would say, liaiser activities, cultural events and hospitalities.
Also, I would say healthcare. The demand for advanced healthcare services and technology is rising heavily in Saudi Arabia. This demand creates opportunities for American firms specializing in medical devices, pharmaceuticals, healthcare IT solutions.
I would also like to mention construction and infrastructure, and this is a very important sector. I will tell you why. With the ongoing mega projects like NEOM, RITC project, GIDEA, and etc., this will create the perfect atmosphere for the U.S. construction firms to participate in building the infrastructure that is necessary for this ambitious development.
In the sun-scorched Riyadh, the Saudis are getting ready to roll out the red carpet once again. For Saudi Arabia and its neighbours, President Trump's visit isn't just symbolic. It's a strategic reset to rekindle ties with their oldest Western ally. Ties that frayed during the Biden years. For President Trump, this trip is about investment deals. About headlines. It's a chance to bring back home big-ticket investments once he can sell as proof that his America First is working. And it comes at a time of turbulence.
The American economy shrank between January and March, the first contraction in three years. Government spending dipped while imports surged. And uncertainty looms, both at home and abroad. For Trump, the stakes are clear. A successful trip would be projected as a win for his economic agenda. The Gulf is betting on him again. And in a region where handshakes often signal billion-dollar deals, and where politics and profit walk hand-in-hand, this visit is not just about diplomacy.
It's about validation and stability as well. Thanks for listening to this episode of Business Daily, produced and presented by me, Samir Hashmi. To hear more episodes, just search for Business Daily wherever you get your BBC podcasts.
Hey, it's Ryan Seacrest for Jewel Osco. This spring, take care of your entire home, including the air you breathe, and save $5 when you buy $25 worth of participating products in-store or online. Shop for items like Glade plug-ins, AirWick plug-ins, Glade auto sprays, AirWick diffusers, and Glade refills, and save $5 when you spend $25 on participating products. Offer ends May 20th.
Restrictions apply. Promotions may vary. Visit Jewelosco.com for more details.