SR4.4 trillion spending drives growth

Updated 12 June 2015

SR4.4 trillion spending drives growth

JEDDAH: Saudi Arabia’s total spending on development projects during the past five years reached SR4.4 trillion, with 30 percent of the amount going to capital projects, said Fahd Al-Mubarak, governor of Saudi Arabian Monetary Agency.
The SAMA chief made this comment after presenting the central bank’s 50th and 51st annual reports to Custodian of the Two Holy Mosques King Salman during a reception at Al-Salam Palace in Jeddah on Tuesday.
King Salman expressed his satisfaction over the Kingdom’s financial situation as a result of its security and stability. He commended SAMA’s role in strengthening the national economy and implementing monetary policies.
Al-Mubarak expected the Kingdom to make comprehensive economic growth during 2015 and the coming years.
He praised the king for adopting a series of decisions and measures to restructure economic sectors to make them competent to support best utilization of the country’s economic resources.
The two reports covered monetary, banking and financial developments in 2013 and 2014. Crown Prince Mohammed bin Naif, deputy premier and minister of interior, Finance Minister Ibrahim Al-Assaf, Deputy SAMA Gov. Abdul Aziz Al-Fareeh and other senior officials attended the reception.
“The national economy has achieved good results in 2014 with GDP making an actual growth rate of 3.5 percent, exceeding the rate of 2.7 percent achieved in 2013 and the world average of 3.4 percent,” Al-Mubarak told the king.
During 2014, the private sector achieved a growth rate of 5.6 percent while the public spending rose to SR1.11 trillion or 40 percent of the GDP. Public debts were brought down to 1.6 percent of the GDP while the balance of payment recorded a surplus of SR288 billion.
“This is the 16th consecutive year, the balance of payment is making surplus,” the governor pointed out. The cost of living index has been brought down gradually from 6 percent in 2008 to 2.8 percent in 2014.
Al-Mubarak said the monetary and banking sector has contributed to boosting economic activity during the year by providing liquidity required to finance projects. Total liquidity rose by 12 percent in 2014.
The governor said SAMA continued its role in executing the Kingdom’s monetary policies to preserve its liquidity level and ensure price stability.
It backed the Saudi riyal’s exchange rate to serve economic and business activities.
“SAMA’s monitoring of banks and insurance companies has contributed to strengthening the economy with international rating agencies giving Saudi Arabia excellent ratings.
This has strengthened the Kingdom’s economic stability and enabled it to attract domestic and foreign investors,” he explained.
The Kingdom’s economic policies addressed vital issues such as development of the national manpower, modernization of infrastructure, diversification of production base, and fall in oil prices.
Al-Mubarak noted Saudi Arabia’s role in ensuring global oil market stability and its efforts to grab a reasonable share of international oil market. He also stressed the need for diversification of revenue sources instead of depending on a single source that is depleting fast.
“Training and employment of young Saudis and providing them with housing are other challenges facing the country.”
He said the fall in oil prices since the middle of last year posed a big challenge to the national economy. “This demands necessary measures to make optimum use of resources to continue the Kingdom’s development march.”
Meanwhile, Crown Prince Mohammed bin Naif also received copies of the two SAMA reports from Al-Mubarak in the presence of Finance Minister Al-Assaf. “Banks continued to provide their financial services in all parts through branches, ATMs and e-channels,” the governor said. Insurance premiums rose by 20 percent to reach more than SR30 billion, he added.

Visit to Pakistan, India and China proves strategic for Saudi Arabia

Updated 24 February 2019

Visit to Pakistan, India and China proves strategic for Saudi Arabia

  • Benefits of three-country tour include billions in economic deals as well as security initiatives

JEDDAH: The three-country tour of Asia by Crown Prince Mohammed bin Salman that came to a close this weekend was an economic and strategic success, experts say.

“Saudi Arabia might be seen by some as moving to the East,” Salman Al-Ansari, founder of the Saudi American Public Relation Affairs Committee (SAPRAC), told Arab News. “The correct way to put it is that it’s spreading its wings East and West.

“Economic diversification requires strategic diversification. This should not be seen in any way as Saudi Arabia giving the cold shoulder to its most trusted allies, specifically the US,” he said. “And as Joseph Parry said: ‘Make new friends but keep the old; those are silver, these are gold.’”

The tour, which saw Saudi Arabia’s crown prince warmly welcomed by the leaders of Pakistan, India and China, is in line with the crown prince’s Vision 2030, which plans to transform Saudi Arabia’s economy that relies on crude oil exports into a vibrant, diversified economy. The tour resulted in billions of dollars in economic deals as well as initiatives to increase security and combat terrorism.

“Saudi Arabia is the one and only country that can take the leadership position on the global efforts of combating terrorism, specifically in the ideological front,” Al-Ansari said.

Hamdan Al-Shehri, a political analyst and international relations scholar, said that China and Saudi Arabia have the same goals of security and stability. “China shares the Kingdom’s concerns and it knows that our continent has suffered from terrorism issues and international interventions and also troubles in the region.”

The two countries also improved on their mutually beneficial economic ties. As Al-Shehri pointed out: “China needs a huge energy source, and Saudi Arabia is one of these sources that can provide China with energy.”

One significant deal is the $10 billion refining and petrochemical complex, a joint venture between Saudi Aramco and Norinco, to be developed in the Chinese city of Panjin.

Also of great geopolitical significance is the $10-billion oil-refinery in Pakistan’s Gwadar Port, as it is one of the most important parts of China’s One Belt, One Road Initiative, Al-Shehri said. “Global players are willing to invest in this project. The Kingdom’s investment in this field will serve Pakistan and will benefit the Kingdom as well as the (China-Pakistan Economic Corridor).”

And despite its historical relationship with Pakistan, Al-Shehri said that the Kingdom also found common ground with India. For instance, the two countries agreed to set up a working group on counter-terrorism. 

“India shares the Kingdom’s concern about instability in the seas, such as the Indian Ocean and the Red Sea. These are all places of global trade,” Al-Shehri said, adding that he hopes the Kingdom will play a role in resolving border points of contention between Pakistan and India as it did between Eritrea and Ethiopia.

It wasn’t all just business. The crown prince’s tour included some other announcements, including that 2,100 Pakistani and 850 Indian prisoners will be released from the Kingdom’s jails, that the Chinese language will be introduced in the Saudi school curriculum and that Saudi Arabia will soon host several concerts featuring major Bollywood performers.

The crown prince also called for the creation of a health center in Pakistan’s Khyber Pakhtunkhwa province dedicated to the memory of a Pakistani hero who saved 14 lives in Jeddah’s 2009 floods.