ABU DHABI, United Arab Emirates – King Juan Carlos of Spain began a visit to the Persian Gulf region on Monday by telling United Arab Emirates officials that deepening ties with their oil-rich country was a top priority, highlighting the role wealthy Arab states could play in shoring up the battered Spanish economy.
The Spanish head of state made the comments at the start of an economic forum in the Emirati capital Abu Dhabi, his first stop on a tour of six Gulf nations planned in the next few months. He was accompanied by a high-level delegation that includes several Spanish government ministers and representatives of major Spanish companies.
“The important official and business delegation that has come with me to Abu Dhabi today shows that the United Arab Emirates is at the top of our political and economic agenda,” the king said in a chandelier-lit ballroom at the lavish beachfront Emirates Palace hotel.
The visit to the OPEC member nation is expected to focus in large part on boosting trade and investment as Spain struggles to grow its economy and generate much-needed jobs after emerging from a double-dip recession last year. The eurozone’s fourth-largest economy is grappling with a near-record unemployment rate of 26 per cent.
It is the 76-year-old monarch’s first trip off the Iberian Peninsula since he underwent a hip replacement operation in November. He walked with the help of a cane and appeared to be in good health.
The UAE is the second largest Arab economy, behind Saudi Arabia. It is a federation of seven semiautonomous emirates that includes the commercial hub of Dubai and Abu Dhabi, which controls the bulk of the country’s oil wealth.
In 2011, Abu Dhabi’s state-owned International Petroleum Investment Co. took full control of Spanish oil company Compania Espanola de Petroleos SA after paying 3.7 billion euro (then worth $5 billion) for a nearly 49 per cent share from French oil giant Total and offering to buy up other shares it didn’t already own.
IPIC is one of several state-linked investment companies Abu Dhabi uses to invest its oil wealth. It has had a stake in the company, known as CEPSA, since 1988.
Other Gulf states have shown interest in doing business with Spain too.
A Spanish-led consortium is developing a multibillion-dollar high-speed rail link between the Muslim holy cities of Mecca and Medina in Saudi Arabia, and an advertisement for the natural-gas rich state of Qatar’s national airline, Qatar Airways, graces the team shirts of Spanish football club Barcelona.
In 2012, an arm of Qatar’s sovereign wealth fund paid Spanish company Ferrovial SA the equivalent of nearly $750 million for its stake in the company that operates London’s Heathrow and other British airports. Qatar Holding also owns a stake in Spanish power utility Iberdrola SA.
Not every Gulf deal has panned out. Spanish football team Real Madrid last year dropped a licensing agreement it had for a $1 billion theme park in the lesser-developed UAE sheikdom of Ras Al Khaimah because of funding problems.
The Spanish king will visit Kuwait next, and plans to return to the region over the coming months for visits to Bahrain, Oman, Saudi Arabia and Qatar.
Follow Adam Schreck on Twitter at www.twitter.com/adamschreck