Plunging oil prices

Within a month Saudi Arabia will announce it national budget for 2015 and major economic developments in 2014. About 90 percent of the country’s revenue depends on crude oil sales, which determines whether the national budget would be surplus or deficit or balanced.

During the last four months, crude prices dived from $115 to $80. According to the International Monetary Fund and APICORP, $85 price for a barrel is required for Saudi Arabia to balance its budget. There will not be any deficit in 2014 budget as long as spending remains as planned. Economic analysts have predicted that the oil price fall would continue in the coming years because of oversupply. The US was successful in developing new technology to produce shale oil with the cost of production reaching $53. If the oil price stands at $80, shale oil producers can make $27 per barrel.

The fall in oil prices would have a negative impact on the Kingdom’s economy as it depends heavily on oil revenues for its development projects. It will also trash the plan to set up a sovereign fund to manage budget surpluses. The Kingdom will also face problem to pay public debts. During the past 10 years, it had paid SR584.7 billion in public debts using surplus funds.

Oil price fall will affect government spending on housing, HR development, improving living condition of citizens, acquisition of modern technology to diversify revenue and development of knowledge-based economy.

— By Mohammad Al-Aufi

Center to combat rumors

With the increase in use of Internet and the social media, the number of rumors has risen considerably. Rumors spread like wildfire with the support of the new media. This has prompted King Khaled University in Abha to organize a conference last week titled, “International conference for media and rumors: How to confront the dangers it has posed to society.”

The three-day conference, which saw 80 speakers presenting their research papers in 12 sessions, proposed the establishment of a national center to combat rumors that spread through the electronic media. The center will be under the Ministry of Culture and Information.

The center will monitor rumors and give reply in coordination with various government departments. The conference also called for setting up another center to conduct research on such rumors and their negative impact at the national and international levels. Some people have set up their personal centers to spread rumors and level false accusations against others. There are others who have set up websites to give reply to such rumors. But such moves only contribute to further spreading rumors and false information. Some people have mastered the art of making false statements with the intent of defaming others. In this context the formation of a rumor-combating center is essential. We expect that it would do the job professionally without showing any bias in order to protect our society from rumors that could divide the society.

— By Ibrahim Mohammed Badawood

Need for expat professors

I totally agree with the Higher Education Ministry’s plan to recruit highly qualified and experienced professors from different parts of the world to teach at our universities and support research projects.

Dr. Mohammed Al-Ouhali, deputy minister for education affairs, has rightly pointed out that the foreign recruitment was aimed at enriching Saudi universities with experts having deep knowledge on different topics. American universities have achieved outstanding position and standard as a result of the strategy it adopted in recruiting capable professors from all over the world, including India, Latin America and Europe.

US universities also give citizenship to these foreign professors in order to make use of them for the country’s development.

Famous universities in Britain, France and other European countries follow the same strategy. However, I would like to underline that these universities have been very selective while recruiting foreign professors. On the other hand, in our universities, I am sorry to say that the recruitment of foreign lecturers and professors was not done properly as most of them were not highly qualified to enrich our academic atmosphere. We should not appoint unqualified Saudi and foreign lecturers at our universities as they would weaken the country’s educational standard.

— By Dr. Abdul Wahid Al-Humaid

GCC-Iraq relations

GCC countries intend to establish strong relations through official channels such as contacts between top leaderships, exchange of visits by officials and delegations and exchange of messages. But political analysts have emphasized the need for people-to-people contact to boost these relations further.

Nobody will doubt GCC countries’ desire to strengthen the security and stability of Iraqi people and ensure the country’s territorial integrity and sovereignty. In order to strengthen GCC-Iraq ties, we have to open channels to enhance contacts and cooperation between people in the region. We should not obstruct contacts between families in the two countries in the name of nationalism. We should make use of this factor not only during celebrations but also at times of crises. Prominent personalities in Iraq have to take the initiative to safeguard these family relations between people in the region. The formation of a social council for this purpose would have remarkable impact in strengthening unity and solidarity among the Arab countries.

— By Dr. Mutlaq Saud Al-Motairy

Investment in education

In a previous article I have mentioned that we can make a return of $17 for every dollar invested in education. I have also pointed out that capable teachers make education for their students different with efficient teachers helping a student to score 90 percent marks while inefficient ones cause to bring down their result to 37 percent.

Studies have pointed out that excellent teachers should be given good pay hike, not considering their experience but their role in helping students to score good marks. This way the country honors hardworking teachers. In the Arab world, we are badly in need of making real educational progress. We need not start from zero. We can start from where others have stopped. Our investment in education will surely have good returns.

— By Walid Fetaihi

Islamic finance gains growth

Latest reports on the volume of worldwide Islamic finance shows that the interest-free system is growing rapidly year after year with total funds reaching nearly $2 trillion.

Islamic finance doubled during the last five years. This proves that it has won international confidence. Some Arab countries use the system to gain liquidity and solve their economic problems.

Morocco, for example, allowed the issuance of sukuk and establishment of Islamic banks. This is the trend of many Arab and non-Arab countries today as they see Islamic finance as a good source for capital investment. Islamic finance has achieved progress not only in expanding its assets but also in presenting new products that offer alternatives to conventional banking tools.

Apart from Muslims, a large number of non-Muslims also deal with Islamic banking and finance in different countries.

Islamic finance grew rapidly throughout the world due to products such as sukuk, Shariah-compliant mutual funds, cooperate insurance and mortgage. Global finance crisis and increase in oil revenue have played an important role in boosting Islamic finance.

— By Dr. Salah bin Fahd Al-Shalhoub