Saudi Minister of Finance and National Economy, Dr. Ibrahim Al-Assaf, yesterday chaired a meeting of Bank governors who are [finance ministers] from developing countries, members of the International Monetary Fund (IMF), and attended a number of other meetings in connection with the annual assembly of the IMF and the World Bank.
Addressing a meeting of the Development Committee of the World Bank, he stated that Saudi Arabia welcomes the positive accomplishments in the economies of a number of developing countries, especially in Africa, and noted their commitment to economic reforms which has upgraded their ability to face changes in the external environment. Referring to the continuing flow of financing from private sources, Dr. Al-Assaf stated that this indicates the financial markets’ trust in these countries in terms of their executing proper economic policies, and urged the committee to assist developing countries in benefiting from these resources and in improving the banking sector to accommodate them. Referring to the World Trade Organization (WTO), and the importance of the trade agreement signed in Uruguay, Dr. Al-Assaf said that trade exchanges help in improving standards and increasing growth levels. He hoped that the WTO would not adopt new standards that would block international trade, and welcomed the on-going coordination between the WTO and both the World Bank and the IMF. Commenting on finding a solution for the debt problem of developing countries, he said these countries should continue to carry out economic programs which avoid new debt crises.
Addressing the Interim Committee of the IMF, Dr. Al-Assaf said the Saudi economy has started to bear fruit in the light of the wise policies of the government of Custodian of the Two Holy Mosques King Fahd Bin Abdul Aziz, and quoted the Gross Domestic Product (GDP) of the Kingdom as expected to grow by 6.2 percent this year, compared with 4.2 percent last year. Turning to the current account of the balance of payments, he attributed the vast improvement in this to the increase in exports especially in the non-oil sector, which jumped by 10 percent in the first half of 1996 as compared with the same period in 1995, as well as to greater activity in the private sector and industrial investment prompted by an overall stability in prices. Highlighting the role of the banking sector in strengthening economic stability and boosting the private sector, Dr. Al-Assaf affirmed that the Kingdom will continue its economic policies to achieve a balanced budget. Dr. Al-Assaf also noted the improvement in the global economy in terms of production activities, control of inflation, and stability in the exchange rate of major currencies, but observed that there is scope for greater improvement by following suitable economic reform especially in dealing with structural obstacles in industrialized countries. Dr. Al-Assaf stressed the need to support developing countries, since they are going through a transitional stage to a free market system which calls for boosting economic reform policies, especially those related to the banking sector, and affirmed that the experience of the Kingdom of Saudi Arabia has proved that the strength of the banking sector is a very important factor in boosting economic stability and in assisting in the growth of the private sector. In this context, Dr. Al-Assaf stressed the importance of not imposing restrictions on the flow of international trade.