Last week, Deputy Prime Minister and Minister of Foreign Affairs Tonio Borg signed, on Malta’s behalf, a Convention on the Avoidance of Double Taxation as well as a Cooperation Agreement on the Fight against Illicit Trafficking in Narcotic Drugs and Psychotropic Substances and against Organised Crime with the Kingdom of Saudi Arabia.

Dr Borg held talks in Riyadh with his counterpart Prince Saud bin Faisal bin Abdul-Aziz Al Saud on Tuesday.

Saudi Arabia, the largest and most powerful member of the Gulf Cooperation Council, has a population of around 26.5 million. Saudi Arabia, which has an oil-based economy, possesses more than 20 per cent of the world’s proven petroleum reserves. It ranks as the largest exporter of petroleum and plays a leading role in OPEC. The petroleum sector accounts for roughly 80 per cent of budget revenues, 45 per cent of gross domestic product, and 90 per cent of export earnings. About 40 per cent of GDP comes from the private sector.

Roughly 6.4 million foreign workers play an important role in the Saudi economy, mainly in the oil and service sectors. High oil prices through mid-2008 have boosted growth, government revenues, and Saudi ownership of foreign assets, while enabling Riyadh to pay down domestic debt. There are currently 10 companies registered with the MFSA with Saudi Arabian shareholding.

Trade between Malta and Saudi Arabia is on an upswing in Malta’s favour by a very wide margin. Imports are largely made up of two product categories: plastics and articles thereof (66 per cent), and products of the milling industry (29 per cent).

Exports also have a limited base although values are much higher. The major product categories are printed books (45 per cent), preparations of cereals (24 per cent), and miscellaneous edible preparations (24 per cent).

In 2008, Malta exported €15.3 million worth of goods to Saudi Arabia, while the value of imports stood at €1.5 million.