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President Vladimir Putin: Good afternoon, Ladies and Gentlemen.

I would first like to express my most sincere gratitude to the guardian of the two Islamic holy sites, the King of Saudi Arabia, for this invitation to visit your marvellous country. I see this visit as an important milestone in developing Russian-Saudi relations.

The productive talks that we held yesterday reaffirmed our mutual interest in continuing to develop our multifaceted ties. As I am here for the first time in this, the birthplace of Islam, I would like to take this opportunity to wish all the people of Saudi Arabia and all Muslims health, peace and prosperity.

Russia, as you know, is a multiethnic country. It is home to Christians, Muslims and followers of other faiths. These people have all lived harmoniously together for centuries as good neighbours. These relations are not simply the norm for life in our country but are without any exaggeration our national treasure, and we value it like the apple of our eye. With our unique experience of mutually enriching cultures and traditions, we seek to develop a dialogue of civilisations and we support the creation of a fairer international order based on the principles of equality and respect for all peoples no matter what their ethnicity or faith. Russia will pursue this policy in all parts of the world, including the broad region of the Arabian Peninsular and the Persian Gulf.

Time has shown that our views have support in the Arab and other Muslim countries. Our talks with the King of Saudi Arabia confirmed the similarity of our countries’ positions on the main international and regional issues. Russia will continue to expand its constructive cooperation with the Muslim world, including through its status as an observer in the Organisation of the Islamic Conference and in this respect, although our meeting is not about politics, I would nevertheless like to take this opportunity to once more thank the Saudi Arabian leadership, the King of Saudi Arabia, for the help he gave us obtaining this status.

We have taken big steps to develop trade and economic cooperation with the Arab countries over recent years. In this respect, Saudi Arabia can and should have economic significance for our businesspeople, and this cooperation would be very beneficial for both our economies. Our business community’s interest in your market is growing with every passing year. We need to look, of course, at how and where we are present on world markets. The first thing that comes to mind, the first signal that goes off, is that we are quite simply competitors on the world market. And yet we all know how fast the world economy is growing and we know that current and future demand for energy is growing with it. This means that we are not competitors but allies and partners, rather, in developing global energy markets. Even in this sector we have many common interests, and these common interests far outweigh any competition between us.

The Russian-Arab Business Council has become an effective link between the business communities in our countries. It gives businesspeople in Russia and Saudi Arabia the information they need about opportunities and prospects for cooperation. I note that this is an example of a productive public initiative that is taking the lead over state organisations. I would like to thank our colleagues for this initiative and say that this kind of work brings real and tangible benefits for our countries. We will therefore provide this kind of work with all the necessary support, all the more so as there is still much to do to develop our trade and economic relations. Bilateral trade provides us with the indicator for measuring their growth, and the figures are not high as yet, but the pace of growth is good.

These trade figures are far from reflecting the full potential of our cooperation, and even the good growth rate we are seeing today does not completely reflect our potential. I think that this meeting will give us the opportunity to discuss in detail ways of increasing bilateral trade and developing mutually beneficial production and investment projects in general. Our cooperation is most productive in the oil and gas sector at the moment, and this is natural given that Russia and Saudi Arabia are both world leaders in energy production and export. It is in this sector that we have succeeded at finding a common language most quickly. Two of our companies, Lukoil and Stroitransgaz, are working actively in the Kingdom at the moment, and Lukoil plans to invest more than $2 billion in newly discovered gas deposits.

But we could also develop profitable cooperation in other economic sectors, as the speaker who preceded me said. I fully share this view and for my part, I would like to add that we could develop new opportunities for cooperation in the metals sector, nuclear energy, high technology, and joint participation in transport infrastructure development projects. Saudi Arabia, for example, plans to develop its rail network, and this is an area in which we have a lot of experience.

I also note our positive experience of cooperation in outer space. Russia has now put seven Saudi satellites in orbit and the launch of six more satellites is planned. Those of you involved in this sector know that there is a big queue in the world now for satellite launch services. Moreover, some of our European colleagues sometimes have even had trouble launching space craft on time. Saudi Arabia, like Russia, is seeking to diversify its economy and develop high-technology sectors, and so our cooperation in the space sector is very promising and of great interest. I think that in this respect it would be a promising development if Saudi Arabia became involved in the GLONASS satellite navigation system that we are developing very actively at the moment, at an accelerated pace, I would say.

I would like to draw the attention of Saudi investors to the numerous opportunities the Russian market offers. Sustainable economic growth, political stability and a solid legal foundation are all good conditions for long-term capital investment. I know that the Saudi business community is starting to show an interest in our economy now.

I want to emphasise that we would welcome investment from Saudi Arabia. We are ready to look at specific proposals and we hope that the Memorandum of Understanding and Cooperation signed yesterday by Vnesheconombank, Roseximbank and the Saudi Development Fund will give real impetus to the implementation of joint economic projects, including projects carried out in third countries. We could develop very productive cooperation on the markets of third countries.

This constructive and business-minded approach to cooperation testifies to our mutual desire to build long-term relations. I sincerely wish the participants in today’s meeting fruitful and productive cooperation. In conclusion, I would like to thank you all once again for the very warm reception I have been given, and to thank all the citizens of Saudi Arabia for their exceptionally friendly attitude towards our country.

Thank you for your attention.

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Vladimir Putin: It is always a pleasure for me to be in such an environment and before such an audience, because discussions with the business community are always concrete and about reaching clear and specific objectives. Today’s meeting is no exception. My conclusion from what I have heard today is that the Russian and Saudi business communities do indeed have a mutual interest in and desire for cooperation. If this were not the case, we would have heard vague proposals and general political declarations, but what we have heard has been very concrete in nature.

First of all, I would like to share my views on the plans to establish joint financial organisations. This is a good idea, but I want to say also that there is nothing to stop Saudi financial institutions from starting to work directly on the Russian market. Russia’s laws make this possible. You can open subsidiary banks with 100 percent Saudi capital. I am sure that there would be a lot of interest in Russia for Saudi financial institutions. The market for financial services is growing in Russia.

At the same time, joint financial institutions are always interesting in that they combine the efforts and possibilities of both sides. On the Russian side we have financial possibilities and knowledge of the market, and on the Saudi side in this case, we have the knowledge of its own economic sectors and markets. This is a promising project and not only do we not oppose it in any way, but we will give it our political support, if such support should prove necessary.

Concerning the issue of customs duties, I would like to draw your attention to the fact that the Russian government has already decided to lower customs duties on more than 1,000 items, and this work will continue. I think that the members of this audience, the Saudi business community and financial specialists understand why it is now possible for us to do this. The favourable foreign economic situation is enabling us not just to ensure budget revenue but also to put money into the Stabilisation Fund for a rainy day. The Central Bank’s gold and currency reserves are growing and Russia now has the third-biggest reserves in the world — $304 billion. Fiscal imperatives are still very important, of course, but in some cases can now be sacrificed for the sake of primary objective of developing our economy.

The Russian Government has already begun and will continue to lower import duties and other duties on not just any goods but primarily on imports of technological equipment. Saudi Arabia is developing technology, especially in the oil and gas sector, where we also need equipment, and I am sure that if you talk with the specialists they will tell you how much equipment and what type of equipment we buy abroad. This is all easy to find out. But this is not the only sector in which we could cooperate. There are many other areas where we can find mutual interests.

Regarding the idea of a free zone, this is a possibility. We have already passed an according law in this area. We have established production zones in which we provide the most favourable economic, customs and administrative conditions for the development of the sectors that we consider of greatest interest for the Russian economy. We can provide you with information on the conditions in these special economic zones. Saudi investors are welcome to come forward with their proposals today. These zones have already been established and are already functioning. Projects are selected through a tender process, and if you have interesting proposals we could start considering them right away, examine them and begin to carry them out. We do not need to take any special steps to get this process underway. The zones have already been established and are open to everyone, including you. That is one possibility.

The other possibility is technology incubation zones. These zones have also already been established, the legal base is in place and work can begin right away. We could, of course, look at creating special conditions for Saudi-Russian projects, but you are all experienced people and you realise that we would then have to also create special conditions for Swedes, Norwegians and whoever else wants to work in these zones. We prefer to take a sector-based approach, and there are many sectors in which our countries share common interests. You should make use of the opportunities that already exist.

There is one area that we can certainly examine, an area in which we could begin work from scratch. We are currently actively developing the laws we need to establish port zones in sea ports. If you think that we should develop maritime links between our countries, this could become part of an overall project if we first examine what routes we would develop and what activities these maritime links would pursue, aside from passenger traffic, and we could think right now about what we can do at this or that site in Russia or in Saudi Arabia. I would also like to inform you – most of you know already, no doubt – that we signed an agreement yesterday on air links, and this could be just the right moment to begin work on agreements on maritime links. We could therefore discuss the issue of port zones separately.