Saudi Arabia has taken into account public interest, the needs of its citizens and the need to address problems emerging in Saudi society when setting policies.
To this end the country has established government departments and NGOs to care for the interests of citizens, including the National Authority for the Protection of Integrity and Combating Corruption, the Public Authority for Housing and Consumer Protection Association, as well as setting up a unit in the Ministry of Trade and Industry to deal with consumer affairs.
The kingdom’s government has adopted a number of programs and development projects, in addition to what is included in the eighth Five Year Plan and the state budget. These include projects for the Grand Mosque and holy sites, improving infrastructure and primary health care, public education and technical and higher education, public housing and raising the capital of some development funds, as well as strengthening State reserves.
At the recent G20 summit in London King Abdullah bin Abdulaziz highlighted his country’s role in continuing to contribute to stabilizing the oil market, stressing the kingdom’s policies to help developing countries based on the principle of equitable burden-sharing in any international efforts to address the financial crisis and its implications.
He has also launched his ‘Energy for the poor’ initiative, which aims to enable developing countries to cope with rising energy costs and invited the World Bank to organise a meeting as soon as possible for donor countries, and regional and international financial institutions to discuss and activate the initiative.
Saudi Arabia’s economy has performed strongly in 2008, despite the adverse global situation, recording real GDP growth of 4.4% supported by the continued large-scale expansion in the non-oil sector.
The strong performance came following accelerated inflation in the first half of the current year (11.1% year-on-year) but decreased again in April 2009 to hit 4.2% year-on-year in July, driven by weak demand and lower import prices. This was the lowest rate since July 2007. This is due mainly to the slow pace of rising housing rents.
Saudi inflation rates began to decline, as lower commodity prices and a stronger US dollar helped reduce the cost of imports into the country.
High oil prices led to record budget and external current account surpluses in 2008, despite the public expansionary fiscal policy and surge in imports. Part of the surplus has been used to repay domestic debt, which fell by 5% to 13.5% of GDP. The inflows of foreign direct investment have continued to be high at $23bn and net foreign assets of the Saudi Arabian Monetary Agency – Sama increased to $438.5bn, representing 93% of GDP.
Saudi Arabia faces the global financial crisis with stronger economic fundamentals than in previous periods of economic downturn, as the government in recent years enhanced its macro-economic position, strengthened the financial sector and implemented structural reforms to boost private sector-led growth.
The stock market had recorded a 46% decline in 2008, losing half of its value; however, prospects remain generally positive. The growth of total non-oil GDP (which is the appropriate measure of economic activity that supports new employment opportunities in the oil-exporting countries) is expected to increase by 3.3% in 2009, supported by an expansionary fiscal policy. But the decline in oil production may cause a 1% contraction of total GDP for the first time since 1999.
Tuesday, October 13- 2009 @ 16:00 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.