Commerce Sec Wilbur Ross says Saudi economic transformation could be bigger for kingdom than discovery of oil

  • U.S. Commerce Secretary Wilbur Ross said Saudi Arabia's plans to diversify its economy could have an even greater impact than the kingdom's initial development of oil 80 years ago.
  • Ross spoke at a summit of U.S. and Saudi business leaders in New York City, where Crown Prince Mohammed bin Salman is continuing a trip across the United States.
  • Saudi Arabia's Vision 2030 aims to transform the kingdom from an oil-dependent economy to a Middle East hub for trade and commerce.
U.S. Commerce Secretary Wilbur Ross
Mary Turner | Reuters
U.S. Commerce Secretary Wilbur Ross

Count U.S. Commerce Secretary Wilbur Ross as a believer in Saudi Arabia's plans for the future.

On Tuesday, Ross said Saudi Arabia's ambitious aim to diversify its economy could have an even greater impact than the kingdom's initial development of oil 80 years ago.

Ross made his comments at a summit of U.S. and Saudi business leaders in New York City, where Crown Prince Mohammed bin Salman was continuing a trip across the United States that began in Washington last week. The summit drew together business executives and highlighted Saudi Arabia's progress in implementing its economic transformation plan called Vision 2030.

"I think [the Saudis] have a very, very high probability of succeeding, and I think to the degree that folks in this room join, it will make it even more probable that they succeed" -Wilbur Ross, U.S. Commerce secretary

Vision 2030 aims to pave Saudi Arabia's path from an oil-dependent economy to a Middle East hub of international trade and commerce at the crossroads of Asia, Europe and Africa. On Tuesday, Ross said the implications for the global order could be massive and the opportunities for U.S business immense.

"Partnership with the kingdom is not new for the United States. We stood with the kingdom in 1938 as they began really to develop the hydrocarbon resources," Ross told the audience.

"Now, 80 years later we're standing with them as they're about to transform both their society and their economy. This new move I think could be even more dramatic and more far-reaching for the whole geopolitical sector than was the original hydrocarbon."

Ross offered several reasons to back his forecast for Saudi Arabia, the world's biggest oil exporter and the third-largest crude producer.

For one, the Saudis are seeking to leverage their oil wealth and expand into refining and chemicals manufacturing, Ross said. If successful, this would allow the kingdom to capture more value in the energy supply chain by selling not just feedstock crude oil, but higher-cost refined products and chemicals.

Ross also noted that Saudi Arabia has vast, untapped mineral reserves with an estimated value of $1.3 trillion — more than the individual economies of most of the world's nations. Those include substantial deposits of uranium, gold and copper, he said.

Lastly, Ross pointed to the massive construction projects Saudi Arabia is undertaking, including new cities like Qiddiya, the planned home for a nascent Saudi entertainment industry, and Neom, a special economic zone that will function as an urban-scale tech incubator.

Ross said that what encourages him more than the grand plans is the system of highly detailed benchmarks the Saudis have established to measure their progress. The kingdom is monitoring criteria from the increase in average life expectancy to the number of peer-reviewed articles by Saudi scientists that appear in international journals, Ross noted.

"That's the level of precision with which they are trying to manage this incredible transition of their country," he said. "I think they have a very, very high probability of succeeding, and I think to the degree that folks in this room join, it will make it even more probable that they succeed."

To be sure, drumming up deals was a major goal of Tuesday's U.S.-Saudi CEO summit. The organizers announced a list of memorandums of understanding between Saudi and U.S. companies later in the day.

A central goal of Crown Prince Mohammed's visit is easing investor concerns over the detention of hundreds of wealthy Saudis in November.

The Saudi government said the campaign aimed to claw back ill-gotten gains from Saudi princes, officials and businessmen, but the incident — and subsequent reports of coercion and physical abuse — have rattled markets and raised questions about the business environment.

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