H.E. the Ambassador, Mr. Saleh Mohd. Al-Ghamdi speaking at the technical session of the 3^rd India-Arab Summit organized by ASSOCHAM on 16^th November 2005 at New Delhi said that the Govt. of the Kingdom of Saudi Arabia have a direct interest in development strong commercial & economic relations with the Republic of India. Talking of congenial investment climate in the Kingdom, he asked Indian businessmen to seize this opportunity which will help in diversification of the economies of both countries in particular and the region in general.

 

H.E. the Ambassador also said that the relation between the Kingdom & India are on a right track and the forthcoming visit of Custodian of Two Holy Mosque King Abdullah bin Abdulaziz to India is an indication to this.

 

Text of the speech of H.E. the Ambassador Mr. Saleh Mohd. Al-Ghamdi delivered at the Technical Session of 3^rd India-Arab Summit organized by ASSOCHAM on 16^th November 2005 at New Delhi.

 

 

 

 

 

 

Mr. Anil Aggarwal

Mr. D. S. Rawat

 

Ladies & Gentlemen,

 

 

I am glad to be here amongst this top galaxy of captain of Industries and business tycoons of India. I am grateful to ASSOCHAM for inviting me to the 3^rd India – Arab Summit and for providing me with the opportunity to speak on the “Effects of Globalization on Indo-Arab Trade – Need for diversification.” This is a topic where either an economist or businessman should have been invited and asked to share his expertise. I am neither an economist nor a businessman, so whatever I speak may be treated as a layman’s observations who has learnt while interacting with people like you.

 

The relations between India and Arab Countries in general  and Arabian Peninsula in particular including Saudi Arabia which is the largest economy in the Middle East are deeply rooted in history based on common values, cultural identity and mutual economic interests. As a representative of the Kingdom of Saudi Arabia, I will first focus on the overgrowing relations between my country and Republic of India, which is again inseparable part of the globalization process.

 

Saudi Arabia and India have enjoyed age-old economic & socio-cultural ties which have over the years deepened and widened. India enjoys the 9^th position among the top 10 supplier to the Kingdom. Saudi imports from India stands at SR5306 million in the year 2004 which is 3% of the total Saudi import.  Saudi Arabia has remained the principal source of India’s crude oil requirement meeting nearly 26% of its crude oil needs. Saudi Arabia non-oil

 

 

 

 

 

 

 

 

exports to India have shown a rapid growth in recent years. It has become extremely diversified.

 

The Kingdom of Saudi Arabia has on the November 11^th,  become a full member of WTO and will be attending the next ministerial meeting at the end of 2005. The accession of Saudi Arabia to WTO will further integrate its economy into the world economy and will enhance the Kingdoms influence on global economy. WTO will open the Saudi Economy to greater transparency, protection of copyright, rule of law and more foreign investment. At the same time it will allow Saudi Exports the access to WTO Countries. I may take this opportunity to inform you that  as a direct result of the reforms in Saudi financial laws, Saudi Arabia has recently approved State Bank of India to open its branches in the Kingdom. Two Indian Insurance Cos. New India Assurance Co. & Life Insurance Corporation have already opened their operation in the Kingdom.

 

Saudi Arabia has always believed in free economy and liberal market operations.

 

Saudi Arabia’s privatization and economic diversification efforts gained further momentum after the creation of Supreme Economic Council (SEC) in 30^th August 1999. The purpose of the Council is to speed up economic reforms aimed at opening up Saudi markets

and ensure stability for investors. Since that time, privatization and economic reforms have been the driving forces behind the Saudi economy. Saudi Arabia’s push for privatization has several objectives including increasing competition and efficiency in the economy, encouraging domestic and foreign investment and increasing employment opportunities.

 

Saudi Arabia has taken many major steps to encourage privatization and to create conducive atmosphere for investments in the Kingdom as well Saudi investment abroad. One of them is

 

 

 

 

 

 

the creation of  Capital Market Authority for stock markets, and also selling Govt. shares of the major blue chip Saudi companies.

 

In Saudi Arabia, diversification of the structure of industries is taking shape. It is no more oil based industries or economy. It has succeeded to an extent in its non-oil industrialization drive.

 

The structural reorganization of the industrial cities involving the privatization and setting up of technology zones has also added a new impetus to growth. The new industrial agency “Saudi organization for Industrial Estates and Technology Zones” (SOIETZ) has started operations on lines of successful  industrial zones in other parts of the world. Besides providing land for the location of industries, the SOIETZ has the potential to boost transfer of Technology and promotion of innovation in the Saudi industrial sector.

 

There are number of incentives offered by the Saudi Govt. to foreign investors placing them at par with Saudi Nationals which includes hundred percent ownership, loan facilities, owning the commercial & residential properties, legal protection to investment etc., The rate of corporate has been reduced from 45% to 20%.

 

After taking over the  reign of the Govt. the Custodian of the Two Holy Mosques King Abdullah bin Abdul Aziz Al Saud through royal decrees allocated some more capitals to the IDF and more benefits to investors. They are:

 

-                                              Increase of the capital of the Industrial Development Fund (SIDF) from SR 13 billion to SR 20 billion. This will help in supporting the industrial sector and extending incentives to industrial investments inside and outside the Kingdom.

 

 

 

 

 

 

 

 

 

 

-                                              Allocation of SR 15 billion for the program of Saudi Exports.

 

Ladies & Gentlemen, One of the Saudi official studies forecasted that about $ 624 billion worth of projects are in the pipeline in the Kingdom which makes it one of the world’s top most destination for international investors. These projects cover a vast range envisaging massive investments in various vital sector – oil & gas, infrastructure, mining and industries. These sectors are open for interested partners in the region and I hope that India will benefit from that.

 

Taking advantage of liberalized laws & investor friendly climate and political – social stability, many Indian companies have established over 65 Joint Ventures in Saudi Arabia. Besides this there are about 55 Indo-Saudi Joint Ventures in India. There are about 1.7 million Indians, the largest expatriate community in Saudi Arabia helping our economy to grow.

 

On behalf of Govt. of Kingdom of Saudi Arabia, I assure you all that we have a direct interest in developing strong commercial & economic relation with the growing economic giant – Republic of India. Trade and investment are cornerstone of Saudi-India’s relation. We must intensify co-operation and take action to facilitate and expand bilateral economic co-operation. We recognize that our partnership in economic and development co-operation has evolved over the years and this should be further strengthened through more intensive co-operation. This two-way co-operation will diversify the economy of both countries and will be beneficial for their people and to the people of other countries in our region. Diversification of the economy is the need of the hour and I am confident that the efforts of the businessmen in the Arab world and India will boost the economy of not these countries only but the region as well.

 

 

 

 

 

 

 

I must add that Economies of India and the Arab World including Saudi Arabia are complementary to each other and both sides stand to gain tremendously from the economic co-operation. We must channelize our collective efforts and energies to build strong economy in our region.

 

I would like to take this opportunity to inform you that a high power Saudi Business Delegation will be visiting India between 20-23^rd November 2005. They will be in New Delhi on 21^st for meeting with Indian businessmen. This delegation represents the various sectors of Saudi Economy. Their interactions with their Indian counterparts  will open a new vista of co-operation.

 

I must thank you again for inviting me to this august gathering.

 

 

                                                 

 

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