DUBAI, United Arab Emirates -- As Saudi Arabia seeks outside help in diversifying its economy and training workers in non-oil sectors, Japan's government and private businesses are eager to seize new opportunities emerging in the Middle Eastern kingdom.
Last April, Deputy Crown Prince Mohammed bin Salman put forward the "Vision 2030" plan for economic reform. It includes selling shares of state-run oil company Saudi Arabian Oil, or Saudi Aramco, and pouring that money into a government investment fund.
The prince, to whom the king has granted sweeping authorities, is at the forefront of the campaign for change. He met Japanese Prime Minister Shinzo Abe in Tokyo last year and agreed to start a cabinet-level dialogue to come up with joint programs for Saudi reforms. At the first meeting in October in Riyadh, Japanese Economy Minister Hiroshige Seko said he will consider cooperation in renewable energy, small and midsize enterprises, and three other fields. King Salman bin Abdulaziz apparently wants to finalize specifics by traveling to Japan himself.
It is not just the governments that are working closer. Japan's SoftBank Group agreed last October to launch an up to $100 billion investment fund together with a Saudi sovereign wealth fund. Saudi Arabia is not only looking to boost income from non-oil sources, but also to diversify its economy, foster talent and create new jobs.
Hit hard by cheap crude, Saudi Arabia has faced a budget deficit in recent years. The International Monetary Fund downgraded the country's growth outlook to 0.4% for 2017. Prices are starting to recover after OPEC agreed to cut output, but population growth, an extreme dependence on oil and other structural problems continue to pressure the kingdom. Reforms would also impose a burden on the population, such as reduced subsidies, making it imperative that results are delivered quickly.
The prince's ambitious reforms require assistance from foreign businesses -- an opportunity for Japanese corporations to make inroads in Saudi Arabia. Representatives from about 30 companies, including manufacturers, trading houses and financial institutions, accompanied Seko to Riyadh in October with proposals related to the Saudi reforms.
The kingdom is Japan's biggest supplier of crude oil, and better ties are crucial for the Asian country's energy security. Japan is urging Saudi Aramco to list on the Tokyo Stock Exchange in addition to the Saudi bourse, which would breathe new life into the Tokyo market and contribute to the countries' long-term relationship.
But Japan is not the only one pursuing these opportunities. Saudi Arabia is also looking to improve ties with major European powers and China, playing countries against each other in order to take advantage of their strengths.