Saudi Arabia’s economic diversifi cation initiatives, one of the priorities listed in its fi ve-year development plan, has yielded positive results, Dr. Waleed Al-Wohaib, chief executive officer of the International Islamic Trade Finance Corporation (ITFC) – a member of the Islamic Development Bank Group – said in a speech before the first Saudi Conference for Trade Finance and Export held in Riyadh recently.
Dr Al-Wohaib said as a result of Saudi’s diversification efforts, its non-oil sector now accounts for 62 per cent of its GDP, with the private sector contributing 58 per cent of that output.
Dr Al-Wohaib also noted that Saudi Arabia has been ranked 13th among the world’s most competitive economies, according to the International Finance Corporation, and the annual report of the World Bank issued in 2010 entitled Doing Business. The latter highlighted the kingdom’s accelerated economic growth rate resulting from extensive reforms in the economic sector; and classifi ed Saudi Arabia, for the fift h consecutive year, as the best country in which to do business in the Middle East and Arab world as a whole.
Dr Al-Wohaib also noted that Saudi Arabia’s accession to the World Trade Organisation (WTO), had brought benefi t to the Saudi economy in general, and supported the expansion of the Saudi private sector in particular.
He also emphasised the need for Islamic countries to meet the unprecedented challenges of external shocks that can have a disruptive eff ect on trade – as seen in the fi nancial crisis in 2009 – by implementing national policies that can alleviate the diffi culties associated with these challenges.
He pointed out that those plans made to overcome the negative effects of the crisis resulted in renewed confi dence and improved access to credit, which helped international trade to restore its position.
Moreover, he said that global trade was currently facing a funding defi cit that had reached about $250bn. however, that was a small amount compared with the value of world imports, which amounted more than $12.6 trillion in 2009, representing a decline of more than 20 per cent for the same value for the year 2008, which amounted $16 trillion.
He explained that lack of trade fi nance was not the only factor behind this decline in the world trade. Others included loss of confi dence, ineffi cient economic policies and lack of hard currency. Th ese, too, had to be addressed, he said.