This year’s Top 100 theme is “Trade Diversification: Looking Toward Asia.”
This is in recognition of the dramatic changes in the global economic scene and the economic reforms under way in Saudi Arabia, each influencing the other, though not to the same degree.
Saudi Arabia is strategically located. It enjoys a political stature unrivaled in the Arab world. It has a special place in the hearts of Muslims the world over. It is the only major oil producer with enough extra production capacity to increase supply when the price of a barrel of crude soars. All this invests the Kingdom with a heavy responsibility to its own people and the larger world community. It has to maintain a viable and buoyant economy by maximizing oil revenues while reducing its dependence on oil. Diversification is the name of the game.
Ever since the discovery of oil in 1932, Saudi Arabia’s main trading partners have been the US and certain Western countries. This means that for over five decades not much attention was paid to Asia, although the revolution in electronic equipment made the Saudis look to Japan and later to Korea. Car imports also rose sharply from Asia. Rice was imported from India and Pakistan. However all this pales into insignificance when compared to the volume of trade with the West.
But this situation could not continue forever. The East Asian economies were growing rapidly, making Asia an important player in the world economy. Factories in the Tiger economies were scrambling to keep up with soaring export orders and increasing domestic demand. This completely altered the global economic landscape and the Saudis had to take note of this if they did not want to be left behind.
Added to this were the developments following the Sept. 11, 2001 attacks. Americans say 9/11 changed everything. This may or may not be true. But something certainly did change in our part of the world. The relentless political and media attacks on Saudi Arabia in the wake of 9/11 made many rethink the wisdom of our continuing to deal with those countries and companies who are out to defame us.
The result was a “Look East” policy. It was not a spur-of-the-moment decision but one based on mutual benefit and interest and arrived at after much deliberations.
Custodian of the Two Holy Mosques King Abdullah’s visit to India, China, Malaysia and Pakistan grabbed the world headlines. There were baseless speculations too. Some wondered, without so much as a hint from our side, whether the Saudis were spurning the US. This was far from the minds of Saudi rulers and businessmen. All we are interested in is sustained development and diversification. And in an interdependent world how long can you ignore other examples of economic growth and other models of development, especially if they happen to be in the regions near to you?
Of course, this was not a one-way street. The economic and social reforms in Saudi Arabia, especially after its accession to the World Trade Organization in 2005, were attracting Asian attention and boosting their confidence in the Kingdom. Through 5-year development plans, the Saudi government was using its oil income to transform a relatively undeveloped, oil-based economy into that of a modern industrial state. Industry and agriculture were now occupying a larger portion of the economic space.
Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. Private investment increased in industry, agriculture, banking, and construction companies. These private investments were supported by generous government financing and incentive programs. The seventh plan (2000-2004) gave a much-needed fillip to economic diversification and a greater role for the private sector in the economy. Another attraction was Saudi Arabia’s trouble-free labor market. By any standard, Saudi Arabia is investment-friendly.
India and China, the new giants, were keen to enter the Saudi market and contribute to the non-oil trade. Many joint ventures were set up and trade delegations from both sides crisscrossed each other.
In short, the outsiders’ perception of Saudi Arabia is changing just as it is helping transform the Kingdom’s economic and industrial profile. As we said last year, there is a newfound enthusiasm not only among the Kingdom’s business community but also among those foreigners willing to invest money here. In the following pages we hope to draw readers’ attention to this enthusiasm and widen the circle of those who want to join or benefit by this new momentum.
Economic projects, however grandiose, will take us nowhere unless it is informed by a genuine commitment. Equally important is the need to maintain regional balance in development. The whole country needs moving forward, not just parts of it. As a responsible newspaper we consider it our duty to draw the attention of the government and business leaders to avoid a situation in which all economic activities are concentrated in a few, already developed regions. We would also like to emphasize the most basic element of development: Human resources and the need to develop them. As Bill Gates pointed out in an address in Riyadh last year, countries that have become economic powerhouses have some of the best universities. And the articles in this supplement would show that King Abdullah’s vision for his country embraces all the modern concepts of development.
