Despite the unprecedented global financial and economic turmoil, Saudi Arabia maintained progress in its economic growth. Even though growth rates fell they remained positive and now the question is "is the stage set for a resumption of higher growth?" During this years' Euromoney Saudi Arabia Conference in Riyadh more than 1200 prominent figures from the governmental, financial, commercial and industrial sectors will try to find answers to this question.
One long-term risk Saudi Arabia's economic growth faces is its overdependence on oil, especially as Saudi's real GDP is dependent on oil price fluctuation. Oil revenues account for 80 percent of the Kingdom's economy, according to a statement by Khaled A. Al-Faleh, CEO and President of Saudi Aramco, at the 11th annual MIT meeting on Friday. Therefore, diversification and private investment are essential to avoid any negative spill-over effects into other sectors.
"Saudi Arabia needs to have more foreign private investment across a variety of sectors if it is quickly to move its economy away from over-dependence on hydrocarbons," said Richard Banks, Director, Euromoney Saudi Arabia Conference. "Euromoney Saudi Arabia 2010 will present a strategic overview of the key sectors in the Saudi economy and their global relationships as well as identifying specific areas of active market opportunity."
Commenting on the economic outlook for the Kingdom, Mr. Banks said that even though the oil sector's output was reduced, it declined less than expected and even allowed a minimal growth in GDP, adding that with the world economy picking up speed the energy demand will be on the rise again, especially from Asia.
The World Information Administration forecasts the world's oil consumption to grow by 1.1 million barrels a day, reaching 85.2 million barrels a day in 2010. In turn, this should profit the private sector.
Richard Banks went on to say: "This is good news for the Kingdom, but it remains essential to achieve a balanced economy and it is reassuring to see there are many indicators Saudi Arabia is moving in the right direction and attracting more foreign private investment across a variety of sectors that will move its economy away from over-dependence on hydrocarbons. In fact, foreign direct investment is expected to rise in 2010, reversing the trend in 2009 when banks were averse to lending for projects in GCC countries."
This upward trend comes at a time when the world's top oil exporter is making every effort to attract more foreign money to its bourse. Having already allowed indirect foreign share ownership via so-called swap agreements in 2008, Saudi Arabia has launched its first Exchange-Traded-Fund.
Confirming the success of the government's efforts to diversify the economy and reduce dependency on oil, a report issued by the Ministry of Economy and Planning states that non-oil exports in January 2010 grew by 21 percent to SR 9.58 billion compared to SR 7.93 billion in the same period last year. At the same time Saudi imports have decreased by 4 percent from SR 29.49 billion in January 2009 to SR 28.38 billion in January 2010.
The significance of Euromoney Saudi Arabia 2010 is highlighted by H.E. Dr. Ibrahim Al-Assaf delivering the keynote address at this year's conference held at Al Faisaliah Hotel, Riyadh on 18 and 19 May in official partnership with the Saudi Ministry of Finance for the fifth year in a row.
