Kingdom of Saudi Arabia – Australia by Manuscript Design

KINGDOM OF SAUDI ARABIA AND AUSTRALIA

REGIONAL PARTNERS GLOBAL LEADERS

SAMPLE ONLY

Kingdom of Saudi Arabia &

Australia Regional Partners Global Leaders

Table of Contents

Participants Roll of Honour of Participating Companies Advisory Group Chairman’s message, Dr. Glen Simpson

Forwards

Introductions

Chapter One — The Kingdom of Saudi Arabia–Australian Relationship

Saudi Minister for Trade and Industry, HE Abdullah Ahmed Zainal Alireza Australian Minister for Trade, The Hon Dr Craig Emerson MP.

Kingdom of Saudi Arabia Ambassador, H.E Hassan Nazer Australian Ambassador to Kingdom of Saudi Arabia, Mr Kevin Magee

4 5

6 7

8 9 10

An overview of the Kingdom of Saudi Arabia–Australia relationship as it stands today, including trade, political, cultural and investment links and key areas of growth opportunity.

Messages: Prince Al Waleed Bin Talal, Chairman of Kingdon Holdings

Ms Lubna Olayan, CEO of Olayan Financing Company

John Grill, CEO of Wordley Parsons

Anthony Abraham, CEO of Macquarie Agricultural Funds Management and Executive Director, Macquarie Group Limited, Director of Macquarie Alternative Assests Management Limited

Chapter Two — Challenges and opportunities

23 28

The Kingdom’s role as the Custodian of the Two Holy Mosques. Islam and Islamic culture. Australia as a multi-cultural country within the Asia-Pacific.

Messages: HRH Princess Mashel bint Faisal, President of the Business Women’s Forum

HRH Princess Lowia Al Faisal, Vice Chair, Board of Effat College

Dr Abdullah Saeed, NCEIS

Mr Al Bishri, Saudi Culture Attache to Australia

Chapter Three — Bilateral ties

3·1 Agribusiness and food

3·2 Education

3·3 Construction and engineering

3·4 Healthcare and medical

3·5 International trade and logistics

3·6 Engineering and sustainable development

3·7 Automotive and manufacturing

3·8 Business financial services

3·9 Equine trade

4 | CONTENTS

A showcase of key business and investment sectors.

Messages: Dr Fawaz Al Alamy, Former Deputy Minister for Commerce and Chief Negotiator in KSA WTO ascension

Dr Amin Saikal, ANU Australia-Saudi Relations

Colonel Turki, SANG (Saudi Arabian National Guard)

TBA,

Chapter Four — Doing business the Kingdom of Saudi Arabia

Advantages as investment destination; Key government and trade bodies; government and trade bodies, investment attraction support systems: financial markets and regulatory environment; Major cities; major projects and economic cities in the Kingdom; commercial centres; centres of excellence; Systems of government and regulatory framework; Educational system; Business culture, etiquette and style.

Messages: HE Amr Dabbagh, Governer of SAGIA

107

Mr Nick Daicos, Head of Country Al Tamimi

108

Cynthia Dearin, AACCI

109

Chapter Five — Doing business in Australia

110

Advantages as investment destination; Key government and trade bodies; investment attraction support systems; Financial markets and regulatory environment; Systems of government and regulatory framework; Educational system and options; Business culture, etiquette and style.

Messages: Tim Harcourt, Chief Economist Austrade

107

Mr Steve Wilson, ABGSA

108

TBD Saudi

109

Seperator between the two halves of the book

158

Chapter One — The Kingdom of Saudi Arabia–Australian Relationship

An overview of the Kingdom of Saudi Arabia–Australia relationship as it stands today, including trade, political, cultural and investment links and key areas of growth opportunity.

Messages: Prince Al Waleed Bin Talal, Chairman of Kingdon Holdings

Ms Lubna Olayan, CEO of Olayan Financing Company

John Grill, CEO of Wordley Parsons

Anthony Abraham, CEO of Macquarie Agricultural Funds Management and Executive Director, Macquarie Group Limited, Director of Macquarie Alternative Assests Management Limited

Introductions

Forwards

Participants

Kingdom of Saudi Arabia Ambassador, H.E Hassan Nazer Australian Ambassador to Kingdom of Saudi Arabia, Mr Kevin Magee

Saudi Minister for Trade and Industry, HE Abdullah Ahmed Zainal Alireza Australian Minister for Trade, The Hon Dr Craig Emerson MP.

Roll of Honour of Participating Companies Advisory Group Chairman’s message, Dr. Glen Simpson

CONTENTS | 5

ENGLISH ROLE OF HONOUR

6 | ROLL OF HONOUR

Advisory Group Chairmanâ&#x20AC;&#x2122;s message Dr. Glen Simpson

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ADVISORY GROUP | 7

Forward

Saudi Minister for Trade and Industry, HE Abdullah Ahmed Zainal Alireza

8 | FORWORD

Forward

Australian Minister for Trade, The Hon Dr Craig Emerson MP

FORWORD | 9

Introduction

Kingdom of Saudi Arabia Ambassador, H.E Hassan Nazer

Lorem ipsum dolor sit amet, consectetur adipiscng elit. Nam commodo dignissim nibh vel luctus. Curabitur at ante at enim volutpat dapibus. Vivamus lacinia lectus vitae odio semper interdum. Duis in justo eget metus blandit posuere. Nunc bibendum, quam eget lacinia tempor, enim neque laoreet justo, nec mattis quam eros sit amet ipsum. Sed tincidunt placerat dapibus. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam commodo dignissim nibh vel luctus. Curabitur at ante at enim volutpat dapibus. Vivamus lacinia lectus vitae odio semper interdum. Duis in justo eget metus blandit posuere. Nunc bibendum, quam eget lacinia tempor, enim neque laoreet justo, nec mattis quam eros sit amet ipsum. Sed tincidunt placerat dapibus. Praesent tempor aliquet luctus. Nullam augue mi, tristique eu elementum dictum, eleifend in risus. Sed id nunc nisi, et fermentum diam. Donec condimentum lacinia urna, eu porttitor diam tempor ut. Proin in suscipit ligula. Nam turpis nisi, consequat a consequat ut, cursus nec arcu. Aenean venenatis ornare placerat. Fusce venenatis diam ac enim euismod nec porta velit convallis. Proin sit amet arcu eu justo mollis sodales eu semper diam. Vestibulum vel lacus sem. Morbi lectus ligula, porta ut semper in, viverra ut dui. Maecenas nec eros dolor, non cursus quam. Nunc quis nulla sed eros dignissim porta. Nam a ultrices sem. Nam augue sapien, tempor sed pharetra a, lacinia lobortis ante. Praesent et sapien urna. Nunc vitae sodales lacus. Cras ac erat diam. Donec tempor iaculis mauris eu dignissim. Vestibulum est ante, accumsan eget porta nec, iaculis sit amet justo. Fusce eget neque nisi. Aliquam ligula elit, sodales laoreet sodales vitae, mollis sed nulla. Praesent pharetra massa vitae leo vulputate aliquet. Vestibulum est lacus, mollis sit amet rutrum vulputate, condimentum vel ligula. Sed viverra rutrum ligula, sed facilisis est gravida a. Aliquam a augue magna. Vivamus mollis porta mauris eget facilisis. Nam faucibus imperdiet leo. Duis eu tellus nibh, in pellentesque justo. Pellentesque et faucibus lacus. Etiam at diam non tellus euismod pellentesque semper et massa. Nam laoreet tempor lacus aliquet volutpat. Nunc porta risus vitae dolor congue in vulputate dolor tempor. Kingdom of Saudi Arabia Ambassador to Australia, H.E Hassan Nazer

10 | INTRODUCTION

Introduction

Australian Ambassador to Kingdom of Saudi Arabia, Mr Kevin Magee

INTRODUCTION | 11

Q1 is the highest residential building in the world. Gold Coast, Queensland, Australia. PHOTO: Jenny Bonner

PART 1

The Saudi–Australian Relationship The Kingdom of Saudi Arabia and Australia share many common interests and values. The two countries have experienced challenges in common of often harsh and dry environments, building modern national infrastructures with limited populations, dispersed over large distances, and endeavouring to deploy their immense wealth of natural resources to ensure the future wellbeing of their peoples. Both countries achieved nationhood in the 20th Century, yet both have cultures and values forged from ancient traditions and from solid beliefs that continue to inform and enrich their everyday life. Saudi Arabia and Australia are both of considerable strategic importance in their respective regions of the world. They are energy giants: Saudi Arabia in oil and gas and Australia in coal, uranium and, increasingly, in natural gas. Both are mindful of the need to conserve and protect what is perhaps their most precious and precarious resource: water. This publication provides an in-depth review of the importance and growing potential of the relationship between these two significant countries — both vital to world trade. In addition to reviewing the many facets of their commercial engagement and raising awareness of mutual business THE SAUDI — AUSTRALIAN RELATIONSHIP | 13

The Australian Stock Exchange at 20 Bridge Street, Sydney.

opportunities, the aim is to consider the cultural and

The commercial environment

social aspects of life in both countries that underpin their

To many people, the relationship between the Kingdom of

value systems, and thereby help to bring about a deeper

Saudi Arabia and Australia seems largely one of trade – of

understanding of each other’s culture and character.

hydrocarbon products swapped for agricultural produce. Whilst this perception may have had some resonance in the

Shared economic outlook Saudi Arabia and Australia have weathered the global

past, the reality is far different today. In 2009, Saudi Arabia was Australia’s second largest

financial crisis better than most. Through judicious

export market in the Middle East, with merchandise

management of their financial systems and sound

exports exceeding $A1.7 billion. In the same year, Saudi

governance principles they have avoided the excesses that

Arabia was Australia’s 17th largest global market, and

have forced many countries into recession and long periods

the major market for Australian-made passenger motor

of economic austerity.

vehicles, which alone were worth $A811 million.

Australia and Saudi Arabia entered the crisis on a solid

The current leader in automotive exports is Toyota

financial footing. Both governments took rapid, decisive

Motor Corporation Australia (TMCA), which in October

action to support aggregate demand, whilst setting early

2010 exported its 500,000th vehicle to Saudi Arabia.

targets to restore budgetary balance. Both are resuming

TMCA has been manufacturing vehicles in Australia since

their trajectories of growth — and are well positioned to

1963, and in 2009–10 the company produced 105,826

share in its each other’s burgeoning business opportunities.

Australian-made cars for the Australian and overseas

14 | THE KINGDOM OF SAUDI ARABIA — AUSTRALIA: REGIONAL PARTNERS, GLOBAL LEADERS

Australia and Saudi Arabia entered the crisis on a solid financial footing. Both governments took rapid, decisive action to support aggregate demand, whilst setting early targets to restore budgetary balance.

markets. The Toyota Camry has strong acceptance for

as well as vehicle parts and accessories. Saudi Arabia was

reliability — and has been a vehicle of choice for the taxi

Australia’s third largest market in the Middle East for live

industry in Gulf countries — although competition from

sheep in 2009 — importing 576,000 head that were valued

Korea and elsewhere is growing.

at $A55 million.

The General Motors Holden (GMH) Caprice, badged

In response, Saudi Arabia direct exports to Australia

Chevrolet Caprice for the Middle East market, is also a

totalled $A631 million in 2009, with approximately half

strong performer in Saudi Arabia, appreciated for its rear-

these exports being crude petroleum. The other exports,

wheel drive performance, as was its previous stablemate,

reflecting the sophistication of the Saudi petrochemical

the Statesman. The Holden Commodore, re-badged the

industries, were principally fertilisers, liquefied propane

Chevrolet Lumina, is also doing well. The Middle East is the

and butane, as well as primary ethylene polymers.

strongest performing market for GMH. All Australian vehicles are acknowledged as well suited

The most prominent producer in this field is Saudi Basic Industries Corporation (SABIC), which is a world

to Saudi Arabia’s hot and dry weather conditions. They

leader in the manufacture of petrochemicals (such as

have superior dust control and robust air-conditioning,

olefins, oxygenates and aromatics, as well as a range of

built as they are to perform in the extremes of the

chemical intermediaries used in everyday essentials like

Australian climate.

textiles, soaps and plastics), fertilisers (including urea

Australia’s other major exports to Saudi Arabia include barley, meat products (excluding beef) and dairy goods,

and phosphates), as well as steel production. SABIC is the largest public company in Saudi Arabia, which in 2008 THE SAUDI — AUSTRALIAN RELATIONSHIP | 15

His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud

was ranked the No. 1 chemical producer in Asia and No. 4 in the world. In addition to this direct merchandise trade, a substantial

Other areas of research where there is a special commonality of interest between Saudi Arabia and Australia is in the field of dry-land farming, including

indirect trade in petroleum products exists through

the use of medics and other legumes to increase the

Singapore’s major oil refining installations, where the

productivity of land. In this context, it is interesting to

refined products of lighter Australian crude oil and those of

note the achievements of South Australian agronomists

heavier Saudi crudes are extensively swapped for different

and farmers in the introduction of exotic legumes to

market applications throughout the Asia Pacific region.

Australian soils. A number of the original medics were

In the services sector, many Australian companies

sourced from the Middle East early last century and further

and more than 4000 Australian professionals, other

cultivated in Australia. Both Australian and Saudi Arabian

experts and their families are living in Saudi Arabia, and

agricultural experts are also deeply engaged in redressing

contributing to Saudi Arabia’s rapid modernisation and

the problems of soil salinity that afflict the soils of both

economic growth. Australians are well represented in

countries, as well as the preservation of aquifers and overall

construction and engineering, the oil industry, mining

water conservation and utilisation.

and agribusiness, financial services, health, hospitality and education. In May 2010, Australia and Saudi Arabia signed a

There are some 12,500 Saudi students currently enrolled in Australian educational institutions, including undergraduate, postgraduate and research students.

memorandum of understanding in higher education to

Since mid-2010, most, if not all, Saudi students studying

build stronger cooperative ties between their respective

in Australia have been on full-support scholarships,

higher education institutions, encouraging research

provided by the King Abdullah Scholarships Program.

cooperation and the exchange of academic staff, researchers

Previously a small number of students covered their

and students between the two nations. An example of the

own expenses. The new provisions, recently introduced,

quality of this collaboration is the signing of a research

are not restricted to the types of courses undertaken,

collaboration agreement in DNA replication between

although there are guidelines with regard to the

the prestigious King Abdullah University of Science and

institutions selected for those programs.

Technology (KAUST) and the University of Wollongong in

Saudi students have been well accepted in Australia and

October 2010. This research partnership is similar to ones

play an active role in their local communities. The Saudi

that KAUST has in place with universities of the calibre of

Government also provides considerable social support, in

Harvard, Stanford and Oxford.

addition to financial assistance, to meet the needs of its

16 | THE KINGDOM OF SAUDI ARABIA — AUSTRALIA: REGIONAL PARTNERS, GLOBAL LEADERS

students studying in Australia, and has established the

as Saudi interests often do not need to disclose their

Saudi Arabian Cultural Mission (SACM) under the aegis of

holdings as readily as publicly-listed foreign corporations.

the Royal Embassy of Saudi Arabia and the Saudi Ministry

Saudi investments tend to be made through private or

of Higher Education. SACM’s regional office for the Asia-

government owned corporations. A relatively recent

Pacific region was moved to Canberra in 2004, and sees to

acquisition, in mid-2008, was Bemax Resources Limited,

the interests of Saudi students; it monitors their progress

a leading Western Australian mineral sands miner, by

and helps them to overcome issues that may impact their

a holding company of the Saudi National Titanium

lives and impede their studies.

Dioxide Company Limited (known as Cristal), which is headquartered in Jeddah.

Investment links

Kingdom Holding Company (KHC), one of the world’s

In investment terms, Australian investments in Saudi

largest and most diversified private investment companies,

Arabia in 2009 were estimated to total some $A64

founded by the financial visionary, HRH Prince Alwaleed

million. There are signs that this is increasing as a result

Bin Talal Bin Abdulaziz Alsaud, holds a 5.5 per cent

of interest from the Australian mining and exploration

interest in News Corporation’s common voting stock and is

industries. In June 2010, the Citadel Resource Group

exploring possible media ventures with News Corp in the

(ASX: CGG) closed a $A250 million capital raising for a

Middle East. In May 2009 Prince Alwaleed met with the

joint venture in a high-grade copper and gold project at

then Foreign Minister, the Hon. Stephen Smith, to discuss

Jabal Sayid, some 350km northeast of Jeddah. Citadel,

a range of matters, including future potential investments

with its Saudi company, Bariq Mining, is focusing its

of benefit also to Australia. The Minister invited Prince

exploration activities particularly on the Arabian Shield

Alwaleed to visit Australia to explore further business

region that flanks the Red Sea.

opportunities.

Saudi investment interest in Australia is also increasing significantly, although it is difficult to quantify investments

Another significant Saudi organisation with interest in developing closer investment links with Australia is the

Processing from mining resources in Australia.

THE SAUDI — AUSTRALIAN RELATIONSHIP | 17

Hon. Stephen Smith MP, Minister for Foreign Affairs

Olayan Group, a major private sector conglomerate with

Gulf states, it does not yet have an active sovereign

over 50 subsidiary companies. It is also a global investor

wealth fund.’ Saudi Arabia is known to be a strategic

in public and private equities. Olayan’s subsidiary, General

investor that takes the long view. It prepares carefully as

Trading Company (GTC), is among the largest importers

it enters new fields.

and distributors of consumer goods in Saudi Arabia, and

These developments, however, suggest that it is the

has long-standing links with SunRice of Australia, one of

intention of the Saudi investment authorities, similar to

the largest branded rice companies in the world.

their private sector counterparts, to broaden the geographic

In terms of mobilising more capital for foreign

spread of their investment portfolios. Australia, as a highly

investment, Saudi Arabia is in the process of creating

attractive, low-risk and business-friendly environment,

a sovereign wealth fund (SWF). The vehicle, Sanabil

appears likely to attract significant interest.

al-Saudia, is managed under the umbrella of the Public Investment Fund (PIF), which was established in 1971 to

The political context

facilitate the development of the country. In 2008 Sanabil

Saudi Arabia and Australia enjoy a long-standing

al-Saudia was formed, with an investment capital of $US5.3

friendship. Australia established its first embassy in Jeddah

billion, initially to focus on investments in the technology

in 1974, and this subsequently was moved to Riyadh in

sector. Market observers suggest that Sanabil al-Saudia is

1984. Saudi Arabia established its embassy in Canberra

likely to broaden its investment focus as it beds down its

in 1983 with the presentation of credentials by the

management teams and investment strategies.

Ambassador, HE Abdul Rahman Nasser Abdula Alohaly.

Also in 2008, the Saudi Government unveiled the

Australia recognises the Kingdom’s strategic importance

Hassana Investment Company as a new vehicle to

in the Middle East and appreciates the key role it plays

invest public pension funds in global equity markets.

in promoting stability in the region — as well as in

These moves were regarded as a significant break from

international energy markets. Both countries have shared

tradition, as the Government of Saudi Arabia has

interests in combating terrorism and extremism within the

pursued conservative investment polices, managed

region and across the world, and work together to promote

through the Saudi Arabian Monetary Authority (SAMA),

collective security.

Saudi Arabia’s central bank. The Financial Times reported

As members of the Group of Twenty (G20) major

in March 2009 that “85 per cent of the Kingdom’s

economies, Australia and Saudi Arabia consult and

foreign reserves of some $US500 billion are in dollar-

cooperate on matters relating to the international financial

denominated, fixed-income securities and, unlike other

system. Finance ministers and central bank governors

18 | THE KINGDOM OF SAUDI ARABIA — AUSTRALIA: REGIONAL PARTNERS, GLOBAL LEADERS

Group leaders at the G-20Summit 2010 in Seoul, South Korea. Pictured above in the top row, third from the left is Saudi Arabia's Foreign Minister, Prince Saud al-Faisal, and in the middle row, third from the right the Australian Prime Minister Julia Gillard.

of G20 countries meet on a regular basis, and heads of

influential, collective voice of the Muslim world and has a

government attend G20 summits. The importance of the

membership of 57 states. It is also the world's second-

G20 was recognised during the GFC in 2008, when all

largest international organisation after the United Nations.

member countries introduced a number of coordinated and far-reaching measures to restore confidence and re-balance

Defence relations

international financial markets.

Australia and Saudi Arabia maintain close relations

Australia is also in dialogue with the Gulf Cooperation

between their respective defence forces. Two Australian

Council (GCC), the high-level, consultative body of the six

defence attachĂŠs are accredited to the Australian Embassy

Arabs states of the Gulf region of which Saudi Arabia is

in Riyadh and are responsible for liaison with the Saudi

a key member. The other five states are Bahrain, Kuwait,

Ministry of Defence with respect to defence policy issues,

Oman, Qatar and the United Arab Emirates (UAE). The

training and other matters related to defence procurement,

headquarters of the GCC is in Riyadh. Negotiations have

acquisition and industry activities.

been proceeding since 2007 on a free trade agreement (FTA) covering goods (rules of origin, government

Cultural connections

procurement, customs procedures, technical barriers to

In Australia today there are more than 360,000 people

trade and sanitary and phytosanitary measures), services

who identify themselves as Muslim. Close to 40 per cent

(including cross border trade, education, movement of

of these people are Australian-born. The remainder come

natural persons, e-commerce, telecommunications and

from a wide range of countries, principally from the Middle

financial services), investment, intellectual property,

East (especially Lebanon and Turkey) and North Africa. The

competition policy, institutional and framework provisions,

numbers of Muslims resident in Australia of Saudi Arabian

as well as dispute resolution. At this time it is not possible

origin are small, and in the main are comprised of students

to estimate when the agreement will be finalised as

and their families who intend eventually to return to home

there are several differences of definition and approach

after completing their studies.

remaining to be resolved.

Muslims in Australia have a special affinity with the

The Australian Government also maintains dialogue

Kingdom of Saudi Arabia as the centre of the Islamic world

with the Organization of the Islamic Conference (OIC),

and site of the Holy Cities of Makka and Medinah. The two

which has its headquarters in Jeddah. The OIC is a highly

great pilgrimages, of the Hajj and Umrah, attract several THE SAUDI â&#x20AC;&#x201D; AUSTRALIAN RELATIONSHIP | 19

Like Australia, Saudi Arabia has increased its development assistance in recent years…from $US1.7 billion in 2004 to $US5.6 billion in 2008.

thousand Australians Muslims each year. Many others

of the four World Cups between 1994 and 2006, and

travel the same route at other times of the year, and this

narrowly missed qualifying again in 2010.

type of visit is known as the Umrah, or lesser pilgrimage. The Saudi royal family and government have been

In Australia football is played in a number of codes, from Australian Rules, through Rugby League and Rugby Union.

generous to the Australian Muslim community and

For many years, soccer, as it was previously known, was the

supported the construction and maintenance of a large

junior partner. In the last few years, however, the game has

number of mosques and schools across the country.

grown rapidly in popularity under the stewardship of the Football Federation of Australia (FFA), formerly known as

Sporting ties

Soccer Australia. The sport is now attracting much larger

Sport is one of the strongest links between countries.

audiences, especially after Australia placed 16th in the

Australia has much closer relations with India, for example,

2006 World Cup and qualified again for the Cup in 2010,

as a result of cricket, than might otherwise be the case. In

although eliminated in the first round.

the past, sporting links between Saudi Arabia and Australia

Both Saudi Arabia and Australia will be represented in

have been relatively limited, other than through the

the final rounds of the Asian Cup in Qatar in 2011, and

Olympic movement. Since 2006, however, when Australia

there will be many opportunities for Saudi Arabian and

was accepted into the Asian Football Confederation (AFC),

Australian teams to meet on football fields in future. The

the two countries have begun to meet more regularly on

games will attract large spectator and viewing audiences in

the sporting pitch.

their respective countries, thus building more people-to-

Football is one of Saudi Arabia’s major national sports, and Saudi football teams have been amongst the most

people contacts and extending sporting links. In terms of other sports, horse racing, endurance

prominent in Asian and world competition. Saudi Arabia

riding and show jumping are popular pursuits in

has won the Asian Cup on three occasions (in 1984, 1988

both countries, and will be covered in the section on

and 1996) and has been runner-up three other times (in

the equine trade. Camel racing is of appeal, too, and

1992, 2000 and 2007). It qualified for the final rounds

Australian camels have raced with some success in the

20 | THE KINGDOM OF SAUDI ARABIA — AUSTRALIA: REGIONAL PARTNERS, GLOBAL LEADERS

Hon. Simon Crean MP Mister for Trade

region. Scuba diving, windsurfing and sailing are also

these figures, the Kingdom’s development assistance as a

very popular in both countries.

percentage of gross national income grew from 0.5 per cent in 2005 to 1.5 per cent in 2008 — a three-fold increase.

Development assistance programs

The Australian Agency for International Development

Both Saudi Arabia and Australia have extensive bilateral

(AusAID), established in 1974, is the Australian

humanitarian assistance and development programs. Both

Government agency responsible for managing Australia’s

are active in international agencies, such as the various

overseas aid program. It operates across an arc of

United Nations assistance programs, the World Food

countries from the Pacific Islands, through southeast

Program and the International Monetary Fund (IMF), as

and south Asia, into the Middle East and Africa.

well as the International Committee of the Red Cross.

AusAID plans and coordinates Australia’s poverty relief

Saudi Arabia’s bilateral aid program has contributed

programs, development assistance, as well as responses to

to close to 4000 projects in over 70 countries (including

humanitarian disasters previously undertaken by a range

over 40 African and 25 Asian countries, and five other

of government departments. AusAID’s current program

countries, such as Bosnia, Kosovo and Albania) since

for the financial year 2009–10 is valued at $A3.8 billion.

its inception. The Saudi Development Fund (SDF) was

It gives priority to programs that generate employment,

established in 1975 as the prime agency to deliver

develop sustainable agriculture and deliver basic services

development assistance through a range of instruments,

such as healthcare and education. It is targeted to provide

including concessional loans for in-country projects,

assistance to the most vulnerable.

budgetary and policy support, as well as debt relief programs. Like Australia, Saudi Arabia has increased its development assistance in recent years. According to the Development Cooperation Directorate of the OECD, Saudi Arabia’s development assistance increased from $US1.7 billion in 2004 to $US5.6 billion in 2008. Based on

THE SAUDI — AUSTRALIAN RELATIONSHIP | 21