Italy woos Saudi and other Gulf nations in trade drive

Reuters/Yara Nardi

• Italy to set up the fund for Saudi to invest in national enterprises
• 160 Italian firms estimated to be working on Saudi giga-projects
• Wider GCC trade drive includes UAE and Qatar

Italy is courting Saudi Arabia to invest in a new fund, as the European country increasingly turns to the GCC to boost trade and investment volumes.

Industry minister Adolfo Urso said Saudi was ready for further investments following a video call with the kingdom’s investment minister, Khalid Al Falih.

Italy’s prime minister Giorgia Meloni plans to set up the fund to invest in “high-potential national enterprises”.

• Italian travel company to invest $75m in Saudi luxury train
• UAE and Italy elevate trade status in bid to grow $7bn relationship
• Cars, property and superjets: Pagani plots future with PIF

Around 160 Italian companies are estimated to be working on giga-projects in the kingdom.

Earlier this month Italy’s Webuild (formerly Salini Impregilo) secured an estimated $2 billion contract to build a rail link between Oxagon and The Line at the Neom giga-project.

In April Saudi’s Public Investment Fund (PIF) purchased 33 percent of Italian yacht builder Azimut Benetti. And Italian hospitality company Arsenale is investing $75 million to develop the first luxury train for “rail cruising” across Saudi Arabia.

A delegation of Saudi companies, led by Al Falih, is expected to visit Italy in September.

The kingdom’s trade with Italy was worth $10 billion in 2021, and is only part of Rome’s trade offensive in the region.

Italy’s National Institute of Statistics reveals that exports to countries across the wider Middle East were up 6 percent in the first quarter of 2023 compared to a year earlier.

Imports from the region fell by more than 13 percent, resulting in a negative trade balance of over $2.5 billion.

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UAE-Italy restored cooperation

Last week government officials and a 50-strong UAE delegation from the government and private sector held talks in Milan. Discussions included the potential to increase bilateral investments in renewable energy, tourism and fintech.

The UAE-Italian relationship – worth $10.8 billion last year – is evolving to explore more investment opportunities in advanced sciences, industries, e-commerce, logistics and supply chains. 

Meloni’s March visit to the UAE and her meeting with President Sheikh Mohamed bin Zayed Al Nahyan restored cooperation following a testing period after Italy vetoed the sale of munitions and missiles to the UAE in 2021, a decision lifted last month.

There have also been poor economic returns reaped by Emirati investments in Italian companies, such as Etihad’s partnership with Alitalia and Mubadala’s acquisition of Piaggio Aerospace. 

But the relationship appears to be back on track – highlighted last week when Investopia, the investment platform launched by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum in 2021, picked Milan to host its first event in Europe.

Daniela Santanchè, Italy’s minister of tourism, said the event would be important in “stimulating and attracting” joint investments between the two countries in the tourism sector.

In March Italy’s Serie A football league announced it was opening its first office in the Middle East and North Africa in Abu Dhabi as it described the region – with more than 30 million fans – as a “key market”. 

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Blooming GCC-wide relations

Italy’s bilateral trade with Qatar now matches that with the UAE after it rose by more than 50 percent last year.

There are estimated to be more than 250 joint Italian-Qatari investment projects across the Gulf. 

Qatar Airways holds 49 percent of AQA Holding, the new parent company of Air Italy. Trade has also been boosted since the opening of the Adriatic LNG station off the coast of Rovigo, which is 22 percent owned by Qatar Terminal Company Limited. 

Italian exports to Kuwait also doubled year-on-year during 2022, rising to $1.52 billion, according to Carlo Bonomi, president of Italian business confederation Confidustria.

Exports included aircraft, aerial devices, computer chips, medical equipment, watches and food products.

In Bahrain, exports to Italy jumped by 124 percent and the volume of trade rose by 28 percent last year compared to 2021. 

Latest figures from the Observatory of Economic Complexity, Italian exports to Bahrain totalled $324 million in 2021 while imports reached $269 million, dominated by raw aluminium.

OEC data also showed that Oman exported $148 million of goods to Italy while imports totalled $454 million in 2021.