January 30, 2009

Saudi News Weekly (Jan 24 - 30, 2009)

Last week I attended the Third Global Competitiveness Forum in Riyadh. These are some major highlights:

“The Kingdom would continue to carry out its development program in the coming years without any interruption. We have allocated $400 billion for the implementation of various projects during the next 5 years. Our ultimate goal is to achieve a top 10 most competitive country ranking through a responsible and enduring way.” Prince Miteb, minister of Municipal & Rural Affairs.

“The financial crisis is expected to continue for the next two years. Oil prices would be increased to $80 as the financial crisis improves. During the year 2007, 69 million cars were manufactured and in 2008, the number was brought down to 63 million. In 2009, it will be further reduced to 55 million cars”. Carlos Ghosn, president of Nissan Motors.

“The world demand for new aircraft could plunge 50 to 60 percent in 2009 due to the global economic crunch and tight credit”. Thomas Enders, Airbus Chief Executive.

“Etisalat has been selected as the third mobile operator in Iran”. Mohamad Omran, chairman of Emirates Telecommunications Corporation.

“The world has to concentrate on developing solar energy. More research should be carried out on developing portable type of solar energy which is renewable too.” Paolo Scaroni, head of the Italian oil company Eni SpA.

“Saudi Arabia is doing its best to maintain a low inflation rate”. Ibrahim Al-Assaf, Finance Minister.

“The world is facing several challenges such as global warming. The best way to provide clean energy is to save energy. 40 percent of emissions come from buildings such as offices, homes and factories. Switching over to electric cars is not going to solve the problem of saving energy”. Jean Tricoire, chief executive officer of Scheneider Electric Company.

“With the change of times, the stress has been shifted from money to human capital and technology.” Mark Fuller, chairman of the board of directors of Monitor Company.

“We have contributed a great deal to develop the Frankfurt Airport and we are interested in taking part in the development of the Kingdom’s airports too”. Willhelm Bender, chairman of Fraport, a company specializing in developing airports.

“Government regulations would only hamper the global economic progress besides burdening the economic activities with additional cost. Small and medium companies rather than large multinationals, will be the worst affected by the government regulations". Robert Huggins, director of the Center for International Competitiveness.

“We need to join hands to solve the current issues and learn from the past recessions, particularly when none of the countries in the world is spared from the current crisis. We need a special program to create jobs, thus have a greater number of taxpayers, as unemployed people cost us a lot”. Jean Chrétien, former Canadian Prime Minister.

“The depletion of the natural resources is a major problem facing the world. The mankind would need five other planets to meet their requirements at the present rate of consumer growth in the United States”. Aron Cramer, president and CEO of Business for Social Responsibility.

“The Kingdom has focused its efforts on protecting its financial stability by increasing liquidity. The government has adopted a policy of increased spending to reduce the effects of global economic recession. The failure of supervisory measures on banks, wrong attitude of credit rating agencies, compensations paid to investors and the reluctance of banks in extending loans were some of the main reasons for the world financial crisis. The Kingdom moved from concentrating on inflationary pressure to achieving financial stability. We expect that the present crisis would lead to better financial management”. Mohammed Al-Jasser, deputy governor of the Saudi Arabian Monetary Agency (SAMA).

“Consumer spending in the US, which accounts for 70 percent of the gross domestic product, was declining considerably. We see today remarkable decline in the sales of retail shops. We know that when a person has a heart attack it will prompt him to change his lifestyle.” Thomas Russo, former vice chairman of Lehman Brothers.

“Credit rating agencies as well as accounting and auditing companies should be held responsible for misguiding the world as they rated financial organizations on the verge of bankruptcy highly. Why don’t they try them in criminal courts? Had it happened in our countries, there would have been a huge outcry. The World Bank is responsible for the crisis because it ignored the reasons that caused the crisis. Where was the World Bank, which is based in Washington, when the crisis erupted in the US? Why did it not issue any guidelines to the American economy like it does with regard to Third World economies? We need an economy based on justice and not on interest”. Saleh Kamel, Chairman of the General Council for Islamic Banks.

“Nations, rich and poor across the board, should sit together and map out future strategy to deal with the global financial downturn. There is a need to improve the functioning of the international monetary system and start a process of systemic rebuilding. We have been exporting $100 billion worth of goods and services annually. No country can afford to allow half of its population to sit idle doing nothing ... we found out in Malaysia that our women were more productive than men in some cases.” Mahathir Mohamad, former prime minister of Malaysia.

“Total foreign investment in Saudi Arabia has expanded from $2 billion to $20 billion during the past three years. More than half of that investment is in non-oil industries, so it matches the Kingdom’s strategy for industrial diversification.” Shinzo Abe, former prime minister of Japan.

Life goes on….
Abdullah Al Alami

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