Gulf education has huge earning potential - Groser

More then 7000 Saudi Arabian students are studying in New Zealand, contributing at least $300 million a year, and there are opportunities to expand education services to the Gulf region, according to Trade Minister Tim Groser.

New Zealand companies need to look to countries such as Saudi Arabia, which has the largest economy and the biggest population among the Gulf Co-operation Council states, Mr Groser said.

"Economists rightly see Saudi Arabia as the next big opportunity in the region, especially in the construction sectors," he said, with tremendous growth in education services in recent years, too.

"New Zealand needs to be closely aligned with this region, economically, politically and culturally," he said on the first leg of a trade mission to the Middle East.

New Zealand is "progressing" a free trade agreement with the GCC states, the first trade deal outside the Asia Pacific region, he said. It would be a catalyst for expanding economic engagement and New Zealand's profile through the Gulf states and the wider Middle East, Mr Groser said.

There was also potential for "enhanced co-operation" with Saudi Arabia in its efforts to improve security of food supply and sustainability in production.

Mr Groser will today preside over the handover ceremony for the newly acquired Fonterra processing plant in Damman, in a move from joint venture to full Fonterra ownership. Last month, Fonterra finalised the purchase of the remaining 51 per cent stake in Saudi New Zealand Dairy Products with former joint-venture partner Saudi Dairy and Foodstuff Company, in a deal worth about $45 million. Mr Groser said total two-way trade with the Gulf states grew 40 per cent in the last decade to be worth more than $3 billion in 2009.

The Gulf states as a group are now New Zealand's sixth largest trading partner, with New Zealand exports alone more than doubling in the last decade.

Education was a perfect match, given Saudi Arabia's young population, with two-thirds of the people under 25 years. There are now 7000 Saudi students in New Zealand in total, with more than 4700 at tertiary level, worth "conservatively" $300m, Mr Groser said.