JEDDAH — Opening the 9th Jeddah Economic Forum (JEF) at the International Exhibition and Convention Center yesterday, Makkah Gov. Prince Khaled Al-Faisal emphasized Saudi Arabia’s potential to become a booming economic hub by utilizing its rich natural and human resources, infrastructure as well as the expertise of its international partners.
“We have a good opportunity to build an economic base to reach new horizons and to utilize our success to achieve further successes. Our ambitions have no limits,” he said.
Further, Prince Khaled urged foreign businessmen to look at Saudi Arabia in general and Jeddah in particular as a business and cultural center that is keen on improving its commercial and investment climate.
“In the coming days, more areas for cooperation will come up,” he told a jam-packed auditorium of business delegates from across the world.
He highlighted the efforts of Custodian of the Two Holy Mosques King Abdullah and Crown Prince Sultan to take Saudi Arabia to new heights.
Meanwhile, Commerce and Industry Minister Dr. Hashim Yamani underlined the need for “cooperation to achieve progress.”
Other prominent speakers elaborated on the theme of the forum this year: “Value Creation Through Alliances and Partnerships.” It is something that Jeddah — as the port of arrival for Haj and Umrah pilgrims — has been successfully doing for 14 centuries.
Partnerships and alliances have been the very basis of wealth creation in this merchant city for centuries.
Ever since the first forum was organized in 2000, international involvement has been the lifeblood of the event. Each year has seen a star-studded list of political, social financial and economic gurus and elders heading to the forum from all corners of the world to impart some of their wisdom and help Middle East Inc. grow and flourish. George Bush Sr., Bill Clinton, Prince Alwaleed Bin Talal, Yevgeny Primakov, Queen Rania of Jordan, President Nursultan Nazarbayev of Kazakhstan, President Hamid Karzai of Afghanistan, Turkish Prime Minister Recep Tayyip Erdogan, Malaysian Prime Minister Abdullah Ahmad Badawi and Irish President Mary McAleese — to name but a few.
The list is as long as it is impressive. This year it is just as impressive. Speakers include Nobel Prize winner and founder of the Grameen Bank Muhammed Yunus, philanthropist George Soros, former chairman of the US Federal Reserve Alan Greenspan, chairman of Virgin Group Richard Branson, Palestinian Prime Minister Salam Fayyad and, via video linkup, the UK’s Prince Charles. Also attending are several leading international bankers, businessmen and captains of international NGOs. Preaching the value of international relationships, the forum is a case of it itself.
So, too, is the Saudi economy. It is not a self-sufficient one, capable of meeting the needs of the home market. It is wholly based on trade — export and import. Where would it be but for alliances and partnerships? Almost every business in the Kingdom is involved in foreign relationships of one sort or another. Where would it be without the trading companies that act as agents for foreign companies? They are the lifeblood of so much business in the Kingdom and the doorway to new industrial development (that, in almost every case, involves a foreign partner). Where would it be if there were no export market for Saudi oil and other downstream petrochemical products? As it is, it is not Saudi Arabia that decides the price of oil, it is the international market.
Even projects intended to develop Saudi industry and create local production and jobs for the growing population inevitably involves foreign partnerships and alliances. Without partnerships there cannot be technology transfer, and without it there cannot be import substitution. The Saudi economy, and with it Saudi prosperity, is one of the most involved in foreign trade in the world — which means that what happens internationally is of immense importance.
It can be a minus as well as a plus. That is partly the case at the moment: the decline in the dollar affects both income (even though the price of oil has risen so spectacularly over the past two years) and the cost of imports because of the dollar-riyal peg. The latter has been a significant — but not the only — factor in Saudi inflation.
Even so, Saudi economic development has been a story for the past half century of “Value Creation through Alliances & Partnerships.” They are what have made the economy what it is. That will remain the case in an ever more economically interdependent world. But increasingly those relationships will be with the east.
Trade in goods and services with Asia is growing at a phenomenal rate. Trade with India, for example, rose four-fold between 2006 and 2007. With China too it has rocketed. In part, that is a combination of the high oil price and Asia now taking more than 50 percent of Saudi crude oil exports as well as the lion’s share of its refined petroleum product and NLG exports. But imports of goods and services from Asia is also climbing steeply. Saudi Arabia now imports almost as many goods from China as it does from the US although trade in services remains a long way behind, as does Chinese investment in the Kingdom compared to that of the US.
Partnership is not just about joint ventures or the contracts awarded. Education has a major role to play — be it foreign universities offering places to individual Saudi students, Saudi universities collaborating with foreign universities, or businesses running training programs either in the Kingdom or elsewhere for young Saudis. Significantly the competition to attract Saudi students between foreign universities has noticeably intensified in the past couple of years, with many of them putting on roadshows in the Kingdom. An example last year was the Korea Education Fair in Riyadh, the first of its kind in the Middle East.
Eleven Korean universities participated. Sponsored by the Korean Ministry of Education and Human Resources Development and part of the Study Korea Project which aims to educate 50,000 foreign students in the country by 2010, it happened just two months after Korean President Roh Moo-hyun’s visit in March when he and Custodian of the Two Holy Mosques King Abdullah agreed to boost education cooperation. In addition, Saudi Arabia operates a government scholarship scheme for students opting to study in Korea.
