U.S.-Saudi Arabia - Ibrahim Al-Assaf - Conference

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ITEM OF INTEREST
May 15, 2009

U.S.-Saudi Relations in a World Without Equilibrium
Conference Transcripts -- Session 2
Ibrahim Al-Assaf

Editor's Note:

Last week a major forum addressing the state of and prospects for the relationship between the United States and the Kingdom of Saudi Arabia was convened in Washington by the New America Foundation (NAF) and the Committee for International Trade (CIT) of the Saudi Chambers of Commerce and Industry. Distinguished speakers spent the day providing perspectives and insights on what the relationship should look like, how economics was shaping the national security picture vis a vis the relationship, the challenges for America in the region and how the perspective on these challenges look from the Saudi Arabian point of view.

Today we are pleased to provide the transcripts from the second session, "Economics as a National Security Imperative: Challenges for Saudi Arabia and the U.S." Among the featured speakers was His Excellency Ibrahim Al-Assaf, Minister of Finance of the Kingdom of Saudi Arabia.

Separate emails will provide each panelist's remarks and the question and answer period transcript. Transcripts for the remaining panel and luncheon remarks will be provided over the next few days. You can find all of the conference materials and related links at a new SUSRIS Special Section. [ "U.S.-Saudi Relations in a World Without Equilibrium" - Conference Special Section ]

Video MP3

U.S.-Saudi Relations in a World Without Equilibrium
Conference Transcripts -- Session 2
His Excellency Ibrahim Al-Assaf
Minister of Finance, Kingdom of Saudi Arabia

[Minister Ibrahim Al-Assaf] Thank you Jane, thank you. That was a nice warm-up for my visit. Ladies and gentleman� It�s indeed pleasure and privilege to address this distinguished gathering on the subject most important to our two countries, as self-evident. Let me start by thanking the Committee on Foreign Trade and the New America Foundation for organizing this conference, and I must pay special thanks to Steve Clemons and our team from the CIT, particularly the� as well as the newly discovered godfather of the CIT, my good friend Abdullah� The Kingdom of Saudi Arabia and the United States have enjoyed a long-standing, deep rooted, and broad based relationship that dates back to the early 1930s. Trading and investment partnership has since flourished, in line with Saudi Arabia�s transformation into a bussling, diversified economy. U.S. firms remain the largest investors in Saudi Arabia, and at the same time the U.S. is a prime destination for Saudi investors. Trade between our two nations has also thrived and the U.S. has remained Saudi Arabia�s largest trading partner for almost half a century, as my colleague Abdullah� mentioned earlier. Moreover, the U.S. has regained the status as the major higher education destination for Saudi students and our latest data shows that we have about twenty-six thousand, not twenty-thousand students studying in the, government-sponsored students studying in the United States. This is about 50% of all Saudi students that are sponsored studying abroad.

Ladies and gentleman, before I share my thoughts on expanding cooperation between Saudi Arabia and the United States going forward, I would like to say a few words about the ongoing global crisis, which is no doubt a very important element and high priority of the U.S./ Saudi international cooperation at this time. This is undoubtedly an unprecedented crisis of enormous global consequences. Originated here, quickly spread to Europe, and before we knew it, it enveloped the whole world. What we now face is not just a loss of confidence in financial markets, but a real globe-deep recession with many countries having to deal with huge declines and devalues of financial and real assets, business shutdowns, and bankruptcies, job losses, and in some cases social unrest. Saudi Arabia is doing all it can to play its part in the international effort to resolve this crisis. Fortunately, prudent policies, conservative investment strategies, and effective regulations have placed Saudi Arabia in a better position to deal with the crisis at home than many other countries. We also have joined the global effort to address the causes and consequences of the crisis. We have strongly support the joint G-20 actions that begun with the November 2008 summit here in Washington. And according to the IMF, the size of the Saudi financial stimulus is as proportioned to our GDP as the highest among the G-20 countries. It was 2.4% in 2008, 3.3% this year, and expected to be 3.5% next year. For this year, we have announced the largest budget in our history, approaching about 130 billion dollars, with 36% increase in investment in order to spare domestic demand and to increase productive capacity. We have also strengthened the capital of important national institutions to enable them to expand financing, especially for large projects more, and medium enterprises, and home ownership. Let me add here that the Saudi physical stimulus package, which is largely targeted to build infrastructure, opens up enormous business opportunities for American equipment suppliers, engineering firms, and contractors� I look forward to opportunities for Saudi Arabia�s businesses and of the United States� stimulus package.

Ladies and gentleman, I am sure you are well aware that Saudi Arabia maintains policies of economic freedom and openness with minimal government intervention. We have an economy that is the largest and attracts the most investments in the Middle East. And Saudi Arabia�s also blessed with the vast natural resources other than oil. We are also fortunate to have a large and growing dedicated youth ready to assume its place and grow the economy. We have been undertaking structural reforms to diversify our economy and reduce its dependence on oil. And if you don�t believe me, listen to the news tomorrow where King Abdullah will be visiting� and he will be inaugurating a number of projects that are worth more than 20 billion dollars. This comes in the heels of another inauguration a couple of years ago, of a big number of projects�mainly to be petrochemical, but also other industry. We have policies, laws, and regulations in place that are among the most business-friendly in the world. And indeed, the World Bank Group doing business report now ranks Saudi Arabia as number 16 among 181 countries bated in business-friendly environment. But we want and are taking actions for as to be among the top 10 countries in terms of business-friendliness.

In short, I can say that Saudi Arabia offers a very hospitable trade and investment environment for American businesses, business community, and other international business communities. The other part of the equation is the environment in the United States for business, for Saudi non-oil exports, and investment. And while activities in these areas are market-driven, I believe there is a scope for increasing awareness as moving barriers, and improving incentives and removing the fear factor. An important link is the signing of an agreement on the avoidance of double taxation. This agreement is a must if we to further promote investment between our two countries. And they must appreciate the great work that the U.S./Saudi Arabian Business Council is doing to promote awareness and� and familiarize the business communities and the two countries with bilateral trade and investment opportunities. The council has been organizing visits from different U.S. states to the Kingdom to promote trade and investment, and I was please to receive a few days ago a delegation from the state of Minnesota, headed by the Honorable member of the U.S. Congress Keith Alison. We need to build on this work. Additional efforts are also need in both the U.S. and Saudi Arabia to improve understanding of our respective cultures. We also need to make it easier for our business students, businessmen, the teachers, tourists, and others to travel to each other�s country. While good progress has been made in improving the procedures to the U.S. for Saudi citizens, I am personally aware of many occasions when Saudi nationals have been unable to undertake timely and travel to the United States due to lengthy visa procedures. I believe further efforts are needed to strengthen this prospect, and smooth it as well. On a related matter, it is essential to strengthen the effort to promote the trade and investment arising protectionist tendencies in various quarters of the world must be resistance. Here I will come the commitment by our leaders at the G-20 to refrain from protectionism. And as you know, financial protection is in particular attracted the attention of the leaders of the recent London summit. According to the World Bank, Saudi Arabia is one of the only three G-20, and the numbers have implemented the stand still commitment of the G-20 Washington Summit. I have a friend from� protectionist policies.

Let me now share briefly a few thoughts about the U.S./Saudi international cooperation. I will focus on three aspects. The first is the joint, the U.S./Saudi investment and third countries, particular developing countries in the neighborhood of Saudi Arabia. I see many possibilities of such investments in food and energy sectors. And in my view, the potential is large and possibilities are many. The key question is to bring the potential partners together and that maybe be useful to set up an informal working group as first step. The second aspect is for our two countries to find common ground and further cooperating a multi-lateral development and financial institutions, particularly the Britain one, institutions. And the regional development banks where both countries are members. Among other things, such corporation would need to recognize the systemic importance of Saudi Arabia and the world economy and the oil market in particular, which I think I mentioned earlier. I should say that over the years, there has been some cooperation on a number of issues with our colleagues of the U.S. Treasury, particularly during this crisis.

Finally, we can work together to find a win-win formula to fulfill our respective obligations and of the new climate regime being negotiated and are UNFCCC platform. Although this is essentially a political process, its outcome would highlight the need for the U.S./Saudi cooperation. We should strengthen cooperation between our two countries to promote production and use of clean fossil fuels, as they will remain the predominant energy base for the world in the foreseeable future as mentioned earlier in this.

Before concluding, ladies and gentlemen, I would like you to think about the potential of further and more active approach to our economic relationship. We all know the opportunities that the U.S. economy offers, even during the current crisis. But not many, particularly in the western hemisphere, know about all the opportunities that our economy offers. But more importantly, in the near future, we will eventually come out of this crisis, then no other country in the world is more well placed to satisfy the increasing world demand for oil and petrochemicals and related products except Saudi Arabia. I mentioned that a little bit earlier as well. Private sector should be ready for even more impressive economic boom that our country will witness soon. Clearly, I am very upbeat about our economic prospects. And on this positive note, I conclude my remarks and thank you, and thank the organizers for providing a platform for what I am sure will prove to be most productive exchange of views. Thank you very much.

[Visit the SUSRIS Special Section "U.S.-Saudi Relations in a World Without Equilibrium" for the transcripts from this and other panels and additional resources.]

Session Two Video

Courtesy New America Foundation

Video MP3

Speaker Biography:

His Excellency Ibrahim Al-Assaf
Minister of Finance, Kingdom of Saudi Arabia

The Honorable Ibrahim Al-Assaf is the Minister of Finance for Saudi Arabia and is a member of the Supreme Economic Council. Dr. Al-Assaf is also chairman of the board of directors of the Public Investment Fund, Pension and retirement Fund, Saudi Fund for Development, and Real Estate Development Fund. He is also governor for Saudi Arabia of the Islamic Development Bank in Jeddah, the World Bank Group in Washington, DC, and several Arab funds and financial institutions. He holds a Bachelor of Economics and Political Science from the King Saud University in Riyadh, a Masters of Economics from the University of Denver and a Ph.D. in Economics from the Colorado State University.

Source: New America Foundation / Committee for International Trade

AGENDA

Panel II: Economics as a National Security Imperative: Challenges for Saudi Arabia and the U.S.

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