Saudi Arabia's Minister of State Abdullah Alireza delivered these remarks on Economic Reforms in the Gulf at the 61st annual conference in October, 2007.
Overview
Abdullah Alireza reflected on the economic improvements in the Gulf region and in the Middle East. He proposed further private sector investment in the regions, discussed the benefits of economic restructuring in conflict-prone areas and suggested greater western collaboration on such restructuring.
Event Summary
Abdullah Alireza began his address on a positive note, drawing attention to the encouraging developments of the economic sector in the Middle East. He emphasized that in the three decades since his last visit to the National Press Club as a Georgetown student in 1968, the economic trajectory of the Middle East has been significantly altered. The benefits reaped for the Kingdom of Saudi Arabia from the economic boom of the 1990s are considerably different than the economic improvements that were ushered in as a result of the windfall from the 1970’s oil boom.
Alireza highlighted Saudi accession to and participation in the World Trade Organization and underscored that despite the region’s ongoing struggle to position itself favorably in the 21st century, the Middle East is not in a state of perpetual negative flux.
Despite the chaotic backdrop, he contended that the Middle East is experiencing an economic boom and the Gulf Cooperation Council (GCC) is emerging as a strong and stable entity, which along with China, constitutes a $300 billion current account surplus—55 percent of which was invested in the US between 2002-2006. The GCC has also helped link North Africa to the rest of the Arab world; GCC exports have been the drivers of integration, increasing from 5.8 percent to 8.9 percent in the last few years alone. The private sector has also been quite active, demonstrating sustainable progress amid economic diversification.
Mr. Alireza noted that Saudi Arabia is ranked 25th among the world economies and the Kingdom boasts a $700 billion stock market. World Bank data demonstrates that unemployment is declining. He noted that some consultants calculated that Saudi Arabia is able to offer some 600,000 jobs in middle management, with approximately 200,000 Saudis qualified to fill the positions. He said there is $600 billion available for economic investment; much of which could be allotted for various sectors including natural gas, chemicals, tourism, technology, and much more. Saudi Arabia is also seeking greater cooperation between China, India, Brazil and Turkey.
The Saudi advisor said King Abdullah took a another step in 2004 to try to open the way for future economic successes for his nation by delineating the four steps needed for a healthy transition to private sector development: diversification, increasing private sector opportunities, enhancing bureaucratic efficiency and utilizing private sector capital for investment. Another effort has included construction of the King Abdullah University for Science and Technology—the only institution outside of the Jeddah, Riyadh and eastern provinces devoted to research and development. Seventy percent of the members on its board of trustees are non-Saudi. Its president is also President Emeritus of Cornell University. Ideally the university would accommodate some 300,000 graduates.
Notwithstanding these hopeful measures, he said US investment in Saudi Arabia remains highly deficient. Mr. Alireza called for greater western economic involvement and suggested greater use of economic restructuring to alleviate some of the issues plaguing Palestine, Lebanon and Iraq. He also underscored the importance of modernization and development in conflict resolution.
Saudi Arabia, he said, can continue to foster a robust economy well into the future by investing the wealth from its vast oil revenues into technical knowledge and human capital and by promoting institutional collaboration. He emphasized that Adam Smith’s predictions 200 years ago rings true today—that free market economics and capitalism is the key to building a viable and sustainable society.
Abdullah Alireza urged that dialogue replace the chaos and destruction in the region that has colored relations between the West and the Muslim world.
About this Event
Abdullah Alireza, Minister of State, Kingdom of Saudi gave this address at the 61st Middle East Institute Annual Conference at the National Press Club in Washington, DC, on Tuesday, October 30, 2007.
Attributions
This brief was prepared by MEI Research Intern Victoria Lichtman, who holds Master’s degrees from the Hubert H. Humphrey Institute of the University of Minnesota and the Ben-Gurion University of the Negev in Beer Sheva, Israel. This brief was peer-edited by MEI Independent Research Intern Albert Shaheen, who holds a Bachelor’s degree from Western Connecticut State University.