In the name of God, the Merciful, the Compassionate.
Members of the U.S.-Saudi Business Council:
It gives me great pleasure to have this opportunity to address you tonight. The U.S.- Saudi Arabian Business Council is a very important forum for promoting and strengthening bilateral relations between the Kingdom of Saudi Arabia and the United States of America. In fact, gatherings like this one must ultimately benefit both of our friendly countries, since they provide opportunities for an exchange of views, and an exploration of ways and means to promote the role of the private sector in U.S.-Saudi relations.
It is opportune to be able to meet with you at a time when the Government of the Custodian of the Two Holy Mosques is undertaking a series of policy decisions aimed at modernizing the Saudi economy and enhancing its institutions to respond to the challenges, and meet the requirements of the changes that exist at home and abroad.
The Kingdom of Saudi Arabia, like many other countries, has over the past decade, gone through difficult economic conditions due to the developments in the oil market. In spite of all the difficulties we encountered, our economy proved its durability and ability to withstand these pressures, thereby restoring trust and maintaining confidence in it.
Rather than hindering our course of development, these difficulties motivated us to take and adopt new economic policies based on our experiences and on the lessons learned from our mistakes. We have also taken into consideration the impact of the challenges of globalization and the demands of today's world trade. In this context, it was incumbent upon us to work hard and diligently in order to develop productive structures and to build a favorable base in order to vitalize the free market mechanism in the following manner:
The private sector will play a major and growing role on the basis of the Kingdom's increasing conviction that privatization is the ideal means towards achieving greater economic and operational competence in the production sectors, as well as providing the necessary services and assuring reduction in Government expenditure. The resulting growth in its turn will attract foreign investment with its technology, as well as encourage domestic savings and propel the process of development and modernization. This policy is based on the private sector bearing the responsibility of fulfilling many of the development needs, for example, participating in the implementation of the important projects that relate to vital sectors such as health, education, communications and shipping. This would allow the private sector to free itself from its traditional role, which was limited to the fields of trade and industry.
With the trend towards broadening the economic base and promoting the role of the private sector in the process of development, we became more aware of the need to work towards the removal of whatever stands in the way of investment in the form of obstacles and obstructions. To achieve that end, the government is currently modernizing its policies of trade, investment and taxation to improve the environment for investment and create suitable and attractive economic conditions. Moreover, the Kingdom is keenly pursuing the establishment of solid, effective relations with its partners on the basis of openness and parity in the pursuit of mutual benefits. Mutual dependence and equitability will be bases of these relations.
In an important step in this direction, a new taxation system for foreign capital will be enacted in order to encourage foreign investment and eliminate prevailing obstacles. In order to promote and enhance this step, it has therefore recently been decided to overhaul the system of sponsorship to meet the requirements of the current situation and achieve flexibility and transparency and secure the rights of all parties. The intention now is to amend the system to allow non-Saudis to acquire property, and to make it responsive to the aspirations of the domestic market, in conformity with the principle of supply and demand, which is the backbone of a free economy.
Among the important reforms that have recently been adopted and which will have a positive effect on economic and investment activities is the establishment of the Higher Economic Council. Its objectives are to enable the private sector to acquire certain Government institutions. This is bound to reflect positively on opportunities for and on the scope of foreign investment.
In fact, the establishment of this Council indicates the Kingdom's desire to prepare the national economy to enter the twenty-first century with competence and steadfastness through developing viable means and strategies for the management of economic affairs. It will also expedite the decision-making process and its efficacy. This will integrate and coordinate the links between concerned departments, to promote the ability to interact smoothly and efficiently with the changes in the global economy.
In a speech given recently by the Crown Prince before the members of the Higher Economic Council at their first meeting, His Royal Highness, President of the Council, explained clearly and in detail the functions of this body and what is expected from it. His Royal Highness stated that the main objective is to achieve a sound fiscal policy and a balanced budget by reducing unnecessary spending and seeking to diversify sustained sources of income for the government without adversely affecting the basic services and standard of living that Saudi citizens enjoy.
The Higher Economic Council will also review the structural reforms needed by the national economy to enhance its effectiveness and ability to compete including the final review of the rules and regulations that govern foreign investment. The main responsibilities of the Council are to crystallize economic policy, rationalize expenditure, control the national debt, and coordinate the activities of the government institutions that deal with economic issues.
Ladies and gentlemen,
The future of the Saudi economy is a promising one. It therefore provides a challenge to your Council to seize the initiatives and grasp the opportunities that the coming decade offers.
In addition to the good efforts that the U.S.-Saudi Business Council has exerted and is exerting in order to promote the trade and investment relations between the Kingdom of Saudi Arabia and the United States of America, it might be of mutual benefit that your Council take into consideration the following practical measures:
(a) The Council could play an important part to promote investment in high-tech projects that focus on training and manpower development in Saudi experts;
(b) The Council could study ways and means of expanding trade by supporting Saudi exports to the United States, facilitating their entry into American markets, and attracting Saudi companies to direct their exports to the United States of America;
(c) The Council could be an important vehicle in facilitating more partnerships between American and Saudi businessmen for the establishment of joint projects in the Kingdom;
(d) The Council could expand the area of the utilization of American technology through enhancing technical and technological cooperation between the two countries.
In conclusion, I would like to extend my thanks and appreciation to the members of the U.S.-Saudi Arabian Business Council for providing the occasion to meet with you. I especially would like to express my thanks and gratitude for the very warm welcome and hospitality. I wish you every success in your endeavors.