In the Name of God the Merciful the Compassionate
Ladies and gentlemen:
Members of the U.S.-Saudi Business Council, the Foreign Policy Association and the Business Council for International Understanding:
It is a real pleasure for me to be with you today, and I hope that this meeting will contribute to a better understanding of the status and foundation of the Saudi economy and its great and promising potential.
The Kingdom of Saudi Arabia has since its inception opted for an open door policy toward the world in the fields of trade and investment. This policy manifested itself in the successful partnership between our two countries in exploring for Saudi oil, and continued through the conclusion more than half a century ago of the first trade agreement with your friendly country. It has culminated in our recent invitation to foreign companies to invest in developing the natural gas sector and its subsidiary industries. The response and proposals of these companies in this respect has turned out to be serious, encouraging and promising.
The Kingdom has adopted a comprehensive policy for economic reform. It has chosen privatization as a strategic option to promote the role of the private sector and boost efficiency and productivity. The process was initiated by privatizing the communications sector, even though it was providing the highest income to the Government.
The Government has also adopted several initiatives to consolidate this policy including the establishment of the Higher Economic Council, the General Investment Authority, and the Higher Commission for Tourism. New laws have also been enacted, covering investments, the system of property ownership for non-Saudis, the relationship between the worker and the entrepreneur, and the rationalization of procedures for litigation under Shariah [Islamic Law] and the settling of disputes. . A new tax system is currently under review. All these initiatives and procedures are geared toward encouraging economic activity and establishing a stable environment for investment.
We understand that the progress of economic reform will not be an easy one but we are determined – God willing- to continue on this path and overcome all obstacles until we reach our objective of developing our national economy and promoting its ability and potential to interact positively with the world's needs and challenges. We will not retract from this path, with the help of God.
The Kingdom of Saudi Arabia with all the economic and political weight it represents and its intention to cooperate and to open up to others and integrate in the world trade system, is seeking to join the World Trade Organization. It has gone a long way in the negotiations and concluded several bilateral agreements with some of its trade partners. We are looking forward to signing a similar agreement as soon as possible with your friendly country, which is the Kingdom’s foremost trade partner. We hope that the U.S. government and the American business community will support our efforts to join the WTO. This entails, as we know, meeting several requirements, yet we are concerned to preserve our right to a just membership that would serve our economic interests.
The Kingdom of Saudi Arabia with all its God-given oil wealth is sensitive to its responsibility towards the global economy. It therefore pursues at all times a balanced oil policy that meets the prerequisites of national development and guarantees a stable flow of oil to the world. The Kingdom is also aware that both a drastic decline in oil prices, as was the case two years ago, and the current sharp price increase, are sources of concern to both producers and consumers.
The decline in prices has a negative effect on the producing countries and on the volume of investments in the oil sector while the increase in prices affects the world's economic growth negatively notably in the developing countries as it also affects the growth of oil demand in the long run.
In this respect, I would like to reiterate that the Kingdom is seeking to guarantee a balanced oil market and stable prices and it understands that this requires the cooperation of all OPEC and non-OPEC members who must bear their responsibilities to guarantee the implementation of the agreed upon range of prices (U.S. $22 to 28 per barrel). It is also imperative to review the agreed upon mechanism to achieve that and to find a new and more effective mechanism that is sensitive to the market conditions.
I would also like to draw attention to the important role incumbent upon the consuming countries, to review the levels of their domestic taxes on oil which constitute a heavy burden on the consumers.
I feel that the time has come for initiating a responsible dialogue between the producers and the consumers in order to reach an understanding that would lead to the stability of this strategic and important commodity in a way that satisfies the interests of both parties.
Finally, I reiterate my thanks to all of you and I hope meetings like this will continue in the future, since they reflect positively on the bilateral relations of our two countries.
Thank you and peace be upon you.