A couple of weeks after North Korean leader Kim Jong-un assured South Korean President Moon Jae-in that Pyongyang would shut down its nuclear test site soon, Saudi Arabia invited South Korea to implement a nuclear project in the West Asian country.
Saudi Energy Minister Khalid al-Falih recently said that he was optimistic on Seoul being shortlisted for the mega project. Speaking at a press conference on the sidelines of an industry event in the South Korean capital, Falih said that the Asia Pacific nation could expect a “good result“, as far as the outcome of bidding on the project was concerned.
The visiting minister revealed that the world’s top oil producer decided to set up two nuclear plants in an attempt to diversify energy supply. He also informed the South Korean media that Riyadh has been holding talks with different companies from South Korea, the US, Russia and China for this purpose. Falih discussed the issue with his South Korean counterpart Paik Un-gyu and President Moon, and urged them to bolster bilateral energy co-operation.
In a separate development, the Fitch Ratings agency has warned that the Saudi-Iran tensions could badly affect the economic development of the region. Jan Friederich, the head (Middle East and Africa sovereign ratings) at Fitch Ratings, said that the heightened geopolitical tensions could hit the Saudi economy hard, although Riyadh might manage to earn sufficient revenues in the coming months.
The expert expressed serious concern over the ongoing civil war in Yemen, saying that it has become a proxy battle between Saudi Arabia and Iran, and their competing ideologies of Sunni and Shia Islam, respectively. Friederich explained that while Sunni Saudi Arabia maintains close ties with the government of President Abdrabbuh Mansour Hadi, Iran backs the pro-Shia Houthi movement that is loyal to the country’s former President Ali Abdullah Saleh. “It’s totally something that is now becoming pretty core to the assessment even though the probability of anything really dramatic happening probably is still quite low, because both sides know how much is at stake,” he added.
Friederich further expressed concern over the structural and fiscal reforms in Saudi Arabia, saying that the reform programme might take a back seat because of soaring oil prices. “There is probably still a certain degree of oil price cyclicality in the reform process. There was a great emphasis before trying to really entrench the reform path, but you do see, a little bit, that pressure on fiscal consolidation has eased up,” he told the press.
Meanwhile, the Fitch expert appreciated the Kingdom’s decision to concentrate on the economic growth. According to Friederich, fiscal consolidation, and not waging a war in Yemen, should be the priority of Saudi Arabia.
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