ECONOMIC NEWS

BANKERS AND OFFICIALS DISCUSS MEASURES AGAINST MONEY LAUNDERING

Banking and law enforcement authorities from 20 Asian countries attended an international conference on money laundering hosted by the Saudi Arabian Monetary Agency (SAMA) in Riyadh in late January. The participants discussed ways of coordinating the efforts of their government and banking authorities in combating financial fraud and money laundering.

In a statement to the conference, Minister of Interior Prince Naif bin Abdulaziz emphasized Saudi Arabia’s cooperation with other governments and international organizations to combat financial, economic and other crimes, including money laundering that could be used to fund terrorist activities. The statement, delivered by SAMA Governor Hamad Al-Sayyari, urged greater cooperation among government and banking agencies and the coordination of their efforts in various countries, and called for a mechanism for streamlining this process. He said Saudi banks and financial institutions have been implementing money laundering measures for many years, but “these have been reaffirmed and upgraded” following the September 11 terrorist attacks against the United States.

Meanwhile, the fifth annual meeting of chief executive officers from banks in the Middle East and North Africa (MENA) was held in Riyadh on February 10. Minister of Finance and National Economy Dr. Ibrahim Al-Assaf expressed confidence in cooperation within the banking community in the MENA region.

 Dr. Al-Assaf urged closer monitoring of lending institutions, saying the terrorist attacks against the United States on September 11 have brought to the forefront efforts to combat money laundering and financing of terrorism, efforts in which Saudi Arabia has been fully engaged from the start. The Kingdom was in fact one of the first countries, he said, to approve and enact all forty recommendations of the Financial Action Task Force. 

Dr. Al-Assaf said that although the global slowdown has had a negative effect with a particularly heavy impact on oil exports and tourism in the region, he was optimistic about the prospects for recovery due to ongoing implementation of appropriate macroeconomic policies, progress in diversifying the production base and intensification of reforms to enhance the investment climate. He added that increased regional integration under the Gulf Cooperation Council (GCC) and the Arab Free Trade Agreement bodes well for the future. For Saudi Arabia, he said, priorities include reducing dependence on oil, promoting private sector growth, and increasing employment opportunities for Saudis through training. 

SAUDI FOREIGN TRADE IN 2000

Saudi Arabia’s foreign trade exchange reached 404 billion Saudi riyals (107.73 billion U.S. dollars) in 2000, according to a report released on February 3 by the Statistics Department of the Ministry of Commerce. Saudi Arabian exports totaled 291 billion riyals (77.6 billion dollars) and imports around 113 billion riyals (30.13 billion dollars). By the end of 2000, there were 503 licensed commercial establishments, and 10,503 companies with a total capital investment of more than 164 billion riyals (43.73 billion dollars).

SAUDI ARAMCO WORLD’S LARGEST OIL COMPANY FOR 13TH YEAR

The oil industry trade journal Petroleum Intelligence Weekly in January named Saudi Arabia’s national oil company, Saudi Aramco, as the world’s largest oil firm for the 13th consecutive year, with Petroleos de Venezuela second and Exxon-Mobil third. The rankings are based on oil reserves and production, gas reserves and output, refinery capacity and product sales in fiscal 2000. Saudi Aramco’s production in that year averaged 8.6 million barrels per day of oil and 4.6 billion cubic feet per day of gas.

GAS INDUSTRY POISED FOR GROWTH

Saudi Aramco President Abdullah bin Juma’a said the gas industry in Saudi Arabia has witnessed tremendous growth in the past two decades and is poised for further growth in the near future. Addressing a symposium on industrial development in the Kingdom over the past twenty years organized by the King Fahd University for Petroleum and Minerals in Dhahran on February 11, Mr. Juma’a said Saudi Aramco currently produces almost 5.4 billion cubic feet of processed fuel gas, 400 million cubic feet of ethane and 700,000 barrels of natural gas liquids per day. With the setting up of new gas facilities, the daily production of fuel gas by the year 2003 will increase to 7 billion cubic feet per day and that of ethane to 600 million cubic feet. He added that Saudi Arabia has around 213 trillion cubic feet of natural gas and 260 billion barrels proven oil reserves.  Sales of petrochemicals, fertilizers and processed minerals produced at Saudi Arabia’s 21 industrial complexes reached 27 billion Saudi riyals (7.2 billion U.S. dollars) last year.

NEW JOBS IN HEALTH SECTOR

Minister of Health Dr. Osama Shobokshi on January 26 announced the formation of a new ministerial committee to devise ways of creating 21,000 jobs in the public health sector over the next five years. Comprising the ministries of finance, health and civil service, the committee will also study ways of improving the public health service in general and the performance of primary health care centers in particular. Speaking to the press after inspecting health facilities in Makkah and the holy sites for the Hajj pilgrimage, Dr. Shobokshi stressed the need for more incentives to attract doctors and medical staff to work in the public health sector, which provides 70 percent of health services in the Kingdom.

PETROCHEMICALS AND PLASTICS LARGEST SECTORS IN EASTERN PROVINCE

The petrochemicals and plastics industries have received the largest investment exposure in the Eastern Province, with a total capital of over 90 billion Saudi riyals (24 billion U.S. dollars), about 79 percent of the overall investment in all industries in the province, according to the semi-annual report of the Ministry of Industry and Electricity released on January 26. Further increases are expected with the rise in demand for such products in both local and international markets. The report also shows that out of 803 factories in the province, 237 are in the metalworking, machinery and equipment sector, with an investment of about 7 billion riyals (1.86 billion dollars). There are 129 plants manufacturing construction materials, ceramics, and glass, with an investment of 7.8 billion riyals (2.08 billion dollars). Foodstuffs and beverage production account for 97 factories, and 3.1 billion riyals (826.6 million dollars).

SAUDI-SYRIAN DUTY-FREE ZONE

Saudi Arabia and Syria on January 16 exchanged documents ratifying an agreement reached last year to establish a duty-free zone between the two countries. The agreement will enhance economic and commercial relations by immediately removing all non-customs restrictions on the products of the two countries and by exempting all reciprocated agricultural commodities from custom tariffs and taxes.

SAUDI-FRENCH INVESTMENT ACCORD

Saudi Arabia will soon sign with France an agreement on the promotion and protection of mutual investment, French Ambassador to the Kingdom Bernard Polette said at a Saudi-French businessmen’s conference in Jeddah on February 6. He said French exports to the Kingdom increased by 6 percent in 2001, reaching 1.5 billion euros, while its imports from Saudi Arabia were worth 2.3 billion euros. France is the fourth largest investor in Saudi Arabia, with investments currently valued at more than 381 million U.S. dollars, with more under way.