Reform Policies, Assaf Tells Oil-Consuming Countries

WASHINGTON, 14 April 2008 — Finance Minister Dr. Ibrahim Al-Assaf yesterday blamed the increase in oil prices on regional political crises, limited refining facilities and big rise in non-commercial contracts.

Addressing an IMF meeting here, the Saudi minister urged oil-consuming countries to soften their regulations that hike prices of petroleum and its products. He reiterated Saudi Arabia’s efforts to stabilize world oil market by ensuring adequate supply.

In his keynote speech, Al-Assaf emphasized the Kingdom’s strong economic performance, adding that it has achieved substantial surplus in current account and general budget.

Government spending on education, social services and infrastructure has increased considerably, he said.

“Structural reforms have contributed to the growth of the private sector, resulting in strong economic performance,” he added.

Al-Assaf also spoke about international economic developments. He expected the economic recession that has hit many developed countries, including the US, would continue through 2008. He, however, believed that combined efforts of these countries could lessen the recession’s negative effects.

Al-Assaf praised the efforts made by US Federal Reserve to boost the economy by cutting interest rates and pumping more money into the market. “Other industrial countries must also adopt viable monetary and financial policies to tackle recession,” he added. He also emphasized the role of sovereign funds in boosting development.

Speaking about growing prices of essential commodities all over the world, including Saudi Arabia, Al-Assaf said it would increase the suffering of the poor. “They will have to spend most of their earning on food and this will have very bad social impact,” he pointed out. Al-Assaf emphasized the moral responsibility of advanced countries in supporting poor states that have limited income.

“The policies adopted by advanced countries including the closure of markets to agricultural exports of poor countries and large-scale agricultural subsidies will have negative effect on poor countries.”