In a speech read out on his behalf at the "Opportunities Arabia 3" conference held at the Institution of Civil Engineers in London on Thursday and organized by the Middle East Association, Al-Alamy said that Custodian of the Two Holy Mosques King Abdullah's vision for the Kingdom comprises robust forward-looking policies, gradual implementation of reforms, and a steady process of restructuring. The aim of this vision is for Saudi Arabia "to adapt to global changes while preserving its valuable traditions."
Sir Alan Munro, former British ambassador in Riyadh, chaired the conference, which attracted a large number of delegates. In her opening address, Baroness Symons, the chair of the Saudi-British Joint Business Council and former UK minister for international trade & investment, highlighted the long-standing trade relations between the two countries, which in 2005 totaled $4.3 billion.
UK exports to the Kingdom totaled some $1.9, while Saudi exports to the UK in recent years have declined to $1.3 billion after a peak of almost $1.8 billion in 2004. The scope for trade and investment between the two countries, however, is much bigger.
Other speakers included Prince Muhammad bin Nawaf, Saudi ambassador in the UK; Sir Sherard Cowper-Coles, the British ambassador in Saudi Arabia; and a number of senior bankers and representatives from major oil, power, construction, retail and other companies.
Al-Alamy stressed that the five fundamentals of the Saudi economic reform and restructuring strategy are: streamlining the decision-making process; diversification of the economic base; strengthening the role of the private sector; creating a favorable investment climate; and the integration of the Saudi economy into the world economy.
The Kingdom's importance to the world economy is not only that it is the largest oil producer at 10.5 million barrels per day (bpd) and has the largest proven reserves of oil lasting for a projected 150 plus years; but also the fact that Saudi Arabia is import-dependent and the 12th largest importer in the world.
The Kingdom's nominal GDP is by the largest in the Middle East, projected at $355 billion in 2006. This compared with $150 billion for the UAE, with the next largest nominal GDP forecast.
One of Saudi Arabia's biggest assets is its young population. Al-Alamy pointed out that 65.4 percent of the population of the Kingdom is under the age of 24. He said the Kingdom has displayed a remarkable political will in the last six years, including the cutting of corporate taxes from 45 percent to 20 percent; the reduction of import duties to around 5 percent; the creation of the 19th biggest capital market in the world; and the repayment of 60 percent of the Saudi national debt. During this time, the Kingdom has also established seven regulatory authorities in the spheres of investment. Some 47 new laws and regulations have been introduced in intellectual property rights, investment and real estate, capital markets and trade secrets (insider dealing), insurance and telecom, subsidies and accredited laboratories.
Saudi Arabia also has the largest market access at 81 percent in the GCC, which has been further enhanced by the Kingdom's accession to the World Trade Organization.
John Sfakianakis, chief economist at SABB, projected the Kingdom's real GDP at 5.5 percent for 2006. The Kingdom's foreign assets by July 2006 were worth $194 billion, projected to rise to $221 billion by end of the year. Not surprisingly the Saudi Arabian Monetary Agency (SAMA) is keen at investing the assets outside the Kingdom.
A World Bank study of 155 countries put Saudi Arabia's investment environment at 38th in terms of attractiveness.
Foreign direct investment (FDI) inflows into Saudi Arabia, according to SABB, totaled $20 billion at end April 2006. Indeed the Kingdom has the best investment business environment in the GCC countries if not the whole Middle East.
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