RIYADH, 21 May 2003 — The recent acts of terrorism will not have any impact on the on-going Saudization campaign, which remains the Kingdom’s strategic option, according to Motasher Al-Morshed, financial consultant and a member of the Saudi Economic Society.
Al-Morshed stressed that Saudization would not be deterred by temporary setbacks like the “cowardly acts” of May 12.
Al-Morshed said: “There won’t be any change in the policy. We have to train young Saudis as the level of unemployment is growing. Here, in the Kingdom, the concept of unemployment takes on a different meaning. Even the self-employed are included among the unemployed.”
Asked if terrorism would have a negative impact on the economy, he said it would only in the short term. “After all, we are a part of the global economy. Even so, it will be a minor and short-term impact. A positive feature is that the oil market has remained at $27 bpd. Together with other elements of the economic reforms program, such as privatization of the utilities sector and the upcoming extension of the railroad, they could go a long way to beefing up the economy.”
Al-Morshed said that despite concerns over terrorism, there was a high level of liquidity in the Saudi stock market, with capitalization reaching SR320 billion — the highest in the Middle East.
According to the Saudi Arabian Investor’s Guide 2003, a MEED/Saudi American Bank publication, the Saudi stock market ended its fourth positive year in a row, up 3.6 percent. “Foreign investors can invest in the Saudi stock market through mutual funds offered by Saudi banks,” it noted.
Meanwhile, M.M. Raju, chief manager, International Banking Department of Al-Rajhi Banking and Investment Corporation, told Arab News that the level of remittances sent through the bank to India, came down from $1.293 billion in 2001 to $1.191 billion last year. Raju attributed the fall to the Saudization program.
By contrast, the level of remittances from the Kingdom to the US went up from $911.8 million to $1.2 billion during the same period. This is despite the fact that the number of remittances declined from 58,587 to 57,649 over the reporting period.
Al-Morshed said two factors were responsible for this trend. First, 80 percent of remittances were denominated in dollars. Secondly, the process of economic recovery began in the US last year following a downturn in 2001 after Sept. 11. This bolstered investors’ confidence in the US.
