LOCATION Saudi Arabia

SPEAKER Foreign Secretary David Miliband

DATE April 08, 2009

Foreign Secretary David Miliband visited Saudi Arabia on Wednesday 8 April to attend the Two Kingdom's Dialogue.

The Two Kingdom's Dialogue, which usually takes place annually, brings together a range of experts from academia, the public and private sector, to discuss issues that impact on both countries. The focus of this years dialogue was on the current world economic situation.

The Foreign Secretary delivered a speech during his attendance at the dialogue, commenting on the global economic situation and the importance of cooperation between the UK and Saudi Arabia.

Read the speech

[Check against delivery]

Your Royal Highnesses,
Your Excellencies,
Ladies and Gentlemen,

[I want to talk today about how the UK and Saudi Arabia can help lead the development of multilateral cooperation appropriate for the modern age.]

At the time of the last ‘Two Kingdoms’ summit in London October 2007, the global economy was booming, and oil prices were high and rising.

Today, however, in the fifth year of the Two Kingdoms dialogues, we meet in the midst of a global recession more severe than any we have seen for seventy years. What began as a financial crisis in the US quickly spread across the world. We have been unable to protect the real economy, and, as people lose their jobs and homes, the social and political impact is now being felt.

The foreign policy implications of this crisis have yet to play out. What is clear though is that the crisis has created a tension between the forces of protectionism and nationalism and those of cooperation and multilateralism. Those who believe that globalisation has gone too far are emboldened. Their demands for national governments to act to protect national industries and to limit flows of people and capital have been strengthened. Yet at the same time, there is a growing recognition that if we want markets to be our servant not our master we need more global political cooperation not less. We need to renew international financial institutions such as the IMF and the World Bank so that they can better manage the risks of a global economy. We need global economic leadership not just from the great economies of yesterday and today, but the powers of tomorrow, which is partly why last week’s London Summit was so important. And we need collective action if we are to tackle the wide range of shared challenges we face – from climate change to conflict, or nuclear proliferation to terrorism.

The foundations of effective multilateral cooperation are of course strong bilateral relationships. Effective partnerships between countries likes ours that are outward looking and engaged on the world stage are the best basis for broader coalitions. So if we are to lead the development of multilateral cooperation for the 21st century, we need to step up our cooperation across the range of shared interests that we have. I see three priorities.

First, regional stability, because conflict and insecurity have scarred the Middle-East for too long. We have not just a moral duty to try to end the suffering of the Palestinians or the Iraqis, but also a shared national interest in restoring stability and prosperity to the Middle-East.

Across the range of security challenges this region faces, Saudi Arabia is the critical regional player. Nowhere is this more evident that on the Arab-Israeli conflict. The Arab Peace Initiative – driven forward by then Crown Prince now King Abdullah- was, and still is, one of the most significant and promising developments since the start of the conflict. It showed that there was not just one Arab partner for peace but many partners. And it showed that what we need and what is actually available is not just a 2 state solution, but a 23 state solution – 22 members of the Arab League plus Israel. Because the Palestinian leadership needs political support from the Arab world in order to agree and implement a deal.  Because on their own the Palestinians do not have enough to offer the Israelis to secure a deal. And because the real prize for Israel – whoever is in charge - is normalisation of its relations with all its Arab neighbours. That is the real meaning of security for all.

When the API was first launched in 2002 it was not given the attention it deserved. But in the last year I have been working hard to support His Royal Highness Prince Saud in promoting the initiative and ensuring that the Arab World is part of a renewed comprehensive peace process. Your efforts in this regard are vital. The letter jointly signed by Prince Saud and the Secretary General of the Arab League and addressed to President-elect Obama in December reflected a genuine willingness to refine the other embodied in the API. The leadership Prince Saud provided to the Arab delegations in New York in January when we negotiated UNSCR 1860 reflected another side of the equation: an urgent sense of the moral need to end this conflict collectively. We are now all looking to the new Israeli Government to make clear that it shares our commitment to achieving such a peace founded on a two-state solution.

Sincere and sustained engagement makes Saudi Arabia a vital partner not just with respect to the Arab-Israeli conflict but on the range of political and security issues we face, and with regard to all common Arab positions. Our two countries have multiple shared goals in this region – addressing Iran’s nuclear ambitions; seeking peace and stability in Lebanon; and, as our troops come home, working to build stability and prosperity in Iraq. There is a clear common agenda and significant scope for further cooperation and partnership.

The second priority is the economic agenda. Given the scale of the current crisis it is tempting to focus just on the immediate problems here. And it is notable here that Saudi Arabia is in a stronger position than most. Having saved oil revenue in the boom times, you are now able to invest in infrastructure to bring jobs to a fast-growing population. And with the economic ties between our countries greater than ever - the UK is now the second largest foreign investor in the Kingdom, and Saudi Arabia is the UK’s largest trading partner in the Middle East – your economic strength is very much in our interests.

But as well as addressing the current problems, we need to plan ahead. Because both our countries face challenges if we are to compete effectively in the global markets of 2020 or 2030. We need serious investment in and cooperation on education and re-skilling if we are to continue to drive down poverty, attract international business and provide jobs for our populations.

There are many opportunities for us to work together here. We already have over 14,000 Saudi students in the UK. And our twin educational sectors are jointly driving innovation in some the most vital sectors for the future: the Universities of Sheffield and Leeds are collaborating with King Saud University on nanotechnology, and Oxford and Cambridge are working with KAUST. I want us to seek out further opportunities for partnership – working with you to support your efforts to build a knowledge-based economy.

The final priority relates to the twin challenges of climate change and energy security. Despite the current downturn, with the global population projected to rise from 6.6 billion now to 9 billion in 2050 and the developing world on a clear path of industrialisation, the world now faces the most rapid and significant increase in the demand for energy in modern history.

Much of this demand will be met with oil and gas.  Saudi Arabia’s role is of course critical. Your investment in the oil industry is key to maximising efficiency and keeping future production levels high and oil affordable. Your role in international oil markets, and in particular your help in stabilising oil prices last summer, is greatly appreciated.

There is however no escaping the need to accelerate the shift to low-carbon. The environmental arguments are well known, and very real in the Middle-East - a region which contains five per cent of the world’s population but only one per cent of the world’s water. And the economic case is becoming increasingly clear too as the world’s growing demand for energy cannot be met by oil and gas alone.

I want our two countries to work together to exploit the economic opportunities that the low-carbon agenda offers. Because by investing in low-carbon technology countries can gain a first-mover advantage in the industries of the future. The Kingdom of Saudi Arabia has taken important steps in this direction by investing in large scale solar energy research, and we are both committed to continuing our join efforts to develop carbon capture and storage technology.

The ties that that bind our Two Kingdoms together are today stronger than ever. The traditional links between our Royal Families, cemented by the State Visit last year, have been supplemented by a much more intensive dialogue between our governments – in the past year both the PM Gordon Brown and I have visited this country twice. And the contacts between our people are more frequent than ever –  25,000 Brits now live and work here, and each year 100,000 visitors flow in each direction, many Brits coming here on pilgrimage to Mecca and Medina.

These ties are the basis for increasing cooperation on a wide range of issues. They are the foundations for partnership in the face of many of the great challenges we now face, and the building blocks for a reinvigorated multilateralism that is essential to our success in the 21st century. I look forward to our discussions today about how to intensify and reinforce this partnership over the coming years. '

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