Kenya-Saudi Arabia Bilateral Relations


KENYAN-SAUDI ARABIA:
DEEPENING OF BILATERAL RELATIONS

Kenya and Saudi Arabia enjoy cordial relations which were strengthened by the visit to the Kingdom by the former President Daniel T. Arap Moi in 1979 and 1983. The retired President was last February hosted by the King Faisal Foundation. The former Minister for Foreign Affairs Ambassador Chirau Ali Mwakwere led a government delegation February, 2005 to attend an international conference on Counter Terrorism in Riyadh. Hon. Mohammed Abdi Mohamed, Minister for Regional Authorities, accompanied by Hon. Moses Wetangula, Assistant Minister for Foreign Affairs delivered condolence and congratulatory message from H.E. President Mwai Kibaki to the new Custodian of the Two Holy Mosques Abdullah bin Abdulaziz upon the death of King Fahd.

Two labour employment opportunity-seeking delegations visited the Kingdom during the course of the year to explore ways and means of creating employment for Kenyans. A Ministry of Labour and Manpower delegation led by Mrs. Rachel B. Dzombo visited Saudi Arabia from 15-18 May to look at the possibility of posting a labour attaché in the Middle East to enhance job opportunities. A delegation from the Office of the President led by Dr. Isayia Onyango, Director, International Jobs office and that included Principal Counsellor B.H.O. Ogutu from the Ministry of Foreign Affairs paid a visit from 3-5 July, 2005 to explore employment opportunities for Kenyans.

Exchange visits between Government officials, businessmen, cultural and religious groups of the two countries have also taken place. Kenya Tea delegations have also visited the Kingdom in 2004 and last year to explore the possibility of penetrating the Saudi and Middle East markets. Currently the tea market is dominated by the Lipton brand from Sri Lanka.

CHANGE OF GUARDS IN SAUDI ARABIA

King Fahd bin Abdulaziz Al-Saud passed away on 1 August 2005 and his brother the Crown Prince, Abdullah bin Abdulaziz bin Al-Saud ascended to power through a smooth transition. King Fahd had ruled Saudi Arabia for over 23 years but poor health during the last decade saw much of the day to day running of governmental affairs being handled by Crown Prince.

The last six months have witnessed the successful organization of the extraordinary session of the Islamic Conference in Makkah; Saudi Arabia accession to the World Trade Organization (WTO); support of women’s rights and empowerment by allowing them to take part in Jeddah Chamber of Commerce and Industry elections where two women were elected and two others appointed to the board. The long serving Saudi Ambassador to Washington Prince Bandar bin Sultan was appointed Secretary of the newly created National Security Council (NSC). The Council is expected to play a similar role to the one in the United States under Condoleezza Rice. It is also expected to play a leading role in shaping both Saudi Foreign and National Security policies, especially on the issue of international terrorism. Saudi Arabia and Kenya have suffered a lot from international terrorism.

SAUDI FOREIGN POLICY

Saudi Arabia has maintained a constant foreign policy during the last two decades and although a change of guards has occurred, the expectation is that there will be continuity in policy. The only noticeable change is that the giant has awoken and we should expect the monarchy under King Abdullah to play a more active role. The recent visit by the Custodian of the Two Holy Mosques to China, India, Malaysia and Pakistan and the IOC Extraordinary Session at Makkah are clear indication that the King wants to engage the world more proactively. International trade and investments are also going to play a central role in Saudi external relations.

The Saudi foreign policy is based on the principles of:

     Strengthening relations with the Gulf States through Gulf Cooperation Council (GCC) and the other Arab countries.

     Strengthening relations with Islamic countries and pushing for Islamism rather than Arabism Non-interference in the internal affairs of other countries.

     Non-interference in the internal affairs of its neighbours.

     Fighting for the rights of the Palestinian people and helping them realise the dream of a nation state.

     Maintaining close ties with the United States, France, Germany, Britain, Russia, China, India and Japan.

     Playing an effective role in the international and regional organizations.

     Offering development assistance to Islamic countries and developing nations through institutions such as the Saudi Fund For Development (SFD), the Arab Bank For Economic Development For Africa (BADEA) and the OPEC Fund For International Development.

     Playing an active role as a new WTO member and in OPEC.

     Strengthening and promoting the cause of Islam as the custodians of sacred cities of Makkah and Madinah and the creedal of the Islamic faith.

The Gulf Peninsula has featured as a principal component of Saudi Arabia’s foreign policy since the establishment of the kingdom due to reasons of culture and history. Consideration is given to the blood relations, historical connections, unique geographical neighbourhood that bring Arab Gulf States together, besides the similarity of existing political and economical systems. Saudi Arabia was a founder member in 1981 of the GCC whose members aim to forging a union in the like of the East African Community and the European Union. Gulf nations cooperate in the areas of defence and security and in economic, social, educational, health, scientific and cultural fields. The headquarters of the Gulf Cooperation Council is in Riyadh; and a large part of its administrative funding comes from Saudi Arabia.

Fight against Terrorism

Saudi Arabia has fought hard against internal dissent eliminating many of the terrorist cells, local Al Qaeda leadership and their source of funding. Saudi Arabia, through pressure from the United States closed many of its charity organisations and closely monitors its banking institutions to prevent flow of funds to terrorist organizations and sympathizers.

Saudi Arabia has since September 11, 2001 arrested more than 800 suspected terrorists of various nationalities, broken up numerous AI-Qaeda cells and seized their arms caches. The Saudi government has introduced new regulations and mechanisms to ensure that its financial systems and charities are not exploited by terrorist groups. It and has also frozen financial assets of suspected financiers of terror.

Saudi Arabia hosted in 2005 Counter-Terrorism conference in Riyadh that brought together some 60 nations and international organizations from all over the world. The resulting Riyadh Declaration called for fostering of tolerance values, dialogue, coexistence, and understanding among global cultures and rejected the logic of the inevitability of clash of civilizations. Saudi Arabia proposed the establishment of an international counterterrorism centre under United Nations auspices for the exchange of information on terrorism and the means to combat it.

The Extraordinary Session of the Organisation of Islamic Conference in Makkah on 7 December recognized that terrorism is a global phenomenon not related or acceptable to any religion, race, or country. In its final Communiqué, the Summit condemned terrorism in all its forms and manifestations, rejected any justification for it, and declared solidarity with member states that have been victimized by terrorism.

The conference stressed the need for preventing terrorist groups from establishing safe-havens in sympathetic countries or allowing them to use or abuse asylum and immigration laws in others. The delegates agreed that extremists who condone, support, incite, or legitimize terrorism should be held accountable for the criminal consequences of their message of hatred and intolerance. That those who abuse the internet and other means of communication for propaganda, recruitment, or incitement be brought to justice.

The Palestinian Question

Saudi Arabia believes that Israeli policies in the occupied territories have caused humiliation and suffering to the Palestinian people, and are breeding anger and hatred in the Arab and Islamic world. It calls for the conflict to be addressed and resolved justly in the interest of a peaceful world through the United Nations. King (then Crown Prince) Abdullah introduced a proposal for a comprehensive Arab-Israeli peace at the Arab Summit at Beirut in March 2002. This historic proposal, which offered Israel peace with all Arab countries and an end to the conflict in exchange for its withdrawal from all Arab territories occupied in 1967, including East Jerusalem has yet to be adopted by Israel.

KENYA-SAUDI COMMERCIAL TIES

Saudi Arabia is important for Kenya for a number of reasons:

     Saudi Arabia is the centre of Islamic affairs in the world, and its monarch who bears the title of the “Custodian of the Two Holy Mosques” and overbearing influence on Muslim nations and Islamic institutions such as the Organisation of Islamic Conferences and the Islamic Development Bank (IDB).

     Saudi Arabia is a leading world producer and exporter of oil with one forth of the world oil reserves.

     Saudi Arabia is the gateway to the Middle East. Last year the country won admission to the World Trade Organization (WTO). The World Bank considers Saudi Arabia to have the best overall environment in the region for doing business; outperforming high-flyers like Dubai.

     Saudi Arabia is the largest free market economy in the Middle East and North Africa holding 25 per cent share of the total Arab GDP.

    The investment environment in the Kingdom reflects traditions of liberal, open market private enterprise policies and its new Foreign Investment Law allows 100 percent foreign ownership of projects and real estate.

    The Kingdom has an impressive record of political and economic stability and has a modern world-class infrastructure.

    The Kingdom is endowed with natural resources including a wide range of industrial raw materials and minerals such as bauxite, limestone, gypsum, and phosphate and iron ore.

    There are no restrictions on foreign exchange and repatriation of capital and profits. It has a very stable currency and has no foreign exchange curbs, and companies are allowed 100 percent repatriation of profits.

    The Kingdom does not impose personal income tax. Labour cost in almost all spheres is low.

    Privatization is a key element of the Kingdom’s economic liberalization and a host of sectors are being opened to the private sector. Telecommunications, electricity, airlines, postal services, railways, port services and water utilities are some of the potential areas for investment.

    Saudi Arabia’s foreign trade totals US $ 78 billion. It benefits from international and regional trade financing and export guarantee programs offered by the Islamic Development Bank (IDB), the Arab Monetary Fund's Trade Financing Program for financing trade and the Arab Investment Guarantee Corporation's programme for ensuring exports and investments.

    Saudi Arabia is a signatory to various regional agencies guaranteeing a level playing field to foreign investors. It is a member of the Multilateral Investment Guarantee Agency (MIGA). The pre-investment assistance provided by SAGIA and other government agencies includes helping foreign investors prepare feasibility studies for industrial projects. They also provide information and statistics for investment projects within the scope of Saudi Arabia’s development plans.

    Since becoming a member of WTO, Saudi Arabian business community has been keen to invest abroad. The recent visit by King Abdullah to China, India, Malaysia and Pakistan is a clear demonstration of this. The King was accompanies by a large delegation of key businessmen and several lucrative deals were signed.

    The largest Saudi investment in Kenya last year was the 17 million pounds sterling ($32 million) purchase of five hotels – the Norfolk, Mount Kenya Safari Club, Mara Safari Club, The Ark and Aberdare Country Club by Prince Al-Walid bin Talal bin Abdul Aziz Al-Saud the 5th richest man in the world with assets worth $24 billion.

    Saudi Arabia offers ample employment to foreigners, and currently hosts about 7-10 million expatriates, both skilled and unskilled. Job opportunities exist in industries, hospitals, education, research, agriculture including the dairy industry, shipping and commerce, telecommunication and IT industry.

    Saudi Arabia ranks eighth in terms of the number of tourists travelling abroad. An estimated 4.5 million Saudi tourists go abroad for holiday every summer; 29 percent travel to Arab countries, 47% to variety of destinations abroad while the rest visit domestic destinations. Saudis spend a total of SR17 billion every year on foreign travel. In the summer of 2004 Saudi tourists spent close to Sr. 60 billion for holidays.

    Potential of trade with Saudi Arabia exists in tea, coffee, horticultural products, cut-flowers and livestock. Currently the balance of trade is in favour of Saudi Arabia. Saudi Arabia imposed a ban on livestock imports from Kenya following the outbreak of the Rift Valley fever. The embargo on camels was lifted in October 2003 but the ban is yet to be lifted on cattle, sheep and goats.

Tea Trade Delegations to Saudi Arabia

Tea Trade delegations led by the Tea Board of Kenya have twice visited Saudi Arabia. The delegations were hosted by both the Riyadh Chamber of Commerce and Jeddah Chamber of Commerce in 2004 and 2005 respectively. The delegations including tea packers and dealers met several Saudi tea dealers and substantive orders for Kenyan tea. The delegations, including an embassy staff, also visited Syria and Jordan where also a number of business deals were secured. The entrance of the Kingdom of Saudi Arabia into the World Trade Organization membership opens greater opportunities for Kenya to venture into numerous trade areas with Saudi Arabia.

Employment Opportunities

The potential for jobs in the Kingdom of Saudi Arabia for professionals particularly in the field of teachers, nurses, engineers, computer experts, technicians in the dairy industry and others is enormous. Bilateral agreements on labour, education, culture, scientific research and technical cooperation need to be signed to actualize such gains.

The Kenya National Chamber of Commerce and Industry needs to lay a more proactive role in the areas of trade since most trade activities in the Kingdom are handled by the private sector.

Tourism

Saudi Arabia and the Gulf is a potential market for Kenyan Tourism that need to be exploited and the literature of Kenyan tourist attraction issued in Arabic. It is important that we tap this lucrative market through aggressive campaign by the Kenya Tourist Board, Kenya Airways, the hotel industry and stakeholders in the tourism industry. The Kenya Tourist Board needs to sign a memorandum of cooperation with the Supreme Commission for Tourism of the Kingdom of Saudi Arabia.

The Saudi Fund for Development (SFD)

The Saudi Fund for Development is the main channel through which Saudi Arabia’s bilateral aid in channelled. A number of projects in Kenya have benefited from the Saudi Fund for Development in priority development sectors such as infrastructure, water, health and education.

SFD Funded Projects, Past and Current

Project Amount (SR Millions) Status
Nairobi Water Supply 055.84 --
Kenya-Sudan Road 034.59 --
Thika-Garissa-Liboi Road 055.84 --
Mombasa Sewage 045.95 --
Kiambere Hydro Electricity Power 039.96 --
Agriculture Sector Support 015.00 --
Garissa Water Supply 031.41 --
Ndundori-Olkalau-Njabini Road -- Feasibility study completed

February 2006.