Saudi Arabia's economic diversification initiatives, one of the priorities listed in its five-year development plan, has yielded positive results, Dr. Waleed Al-Wahaib, CEO of the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group, said in a speech before the 1st Saudi Conference for Trade Finance and Export held in Riyadh recently. Dr. Al-Wahaib said as a result of Saudi's diversification efforts, its non-oil sector now accounts for 62 percent of its GDP, with the private sector contributing 58 percent of that output. Dr. Al-Wahaib also noted that Saudi Arabia has been ranked 13th among the world's most competitive economies according to the International Finance Corporation, and the annual report of the World Bank issued in 2010 entitled “Doing Business”, which highlighted the Kingdom's accelerated economic growth rate resulting from extensive reforms in the economic sector; and classified Saudi Arabia, for the fifth consecutive year, classified as the best country to do business in the Middle East and Arab world as a whole. He pointed out that since 2004, Saudi Arabia has advanced in general classifications for doing business from sixty seventh place to thirteenth place. The Kingdom's positive achievements on economic diversity is showing signs of success, particularly with regard to speeding up the process of privatization, and liberalization of financial markets, reduce subsidies, enhancement market-oriented education and rehabilitation of capabilities. Dr. Al-Wahaib also noted that Saudi Arabia's accession to the World Trade Organization (WTO), has brought benefit to the Saudi economy in general, and supported the expansion of the Saudi private sector in particular. Furthermore, the CEO of ITFC emphasized the need for Islamic countries to meet the unprecedented challenges of external shocks that can have a disruptive effect on trade as we have seen in the financial crisis in 2009 by implementing national policies that can alleviate the difficulties associated with these challenges. He pointed out that the incentive plans in, which have been made to overcome the negative effects of the crisis, resulted in renewed confidence and improved access to credit which is considered vital for the recovery of trade finance operation and helped the international trade to restore its position. Moreover, he said the global trade is currently facing a funding deficit that has reached about $ 250 billion, which is a small amount compared with the value of world imports, which amounted more than $ 12.6 trillion in 2009, representing a decline of more than 20 percent for the same value for the year 2008, which amounted $ 16 trillion. He explained that lack of trade finance is not the only factor behind this decline in the world trade; but other factors such as loss of confidence, inefficient economic policies, lack of hard currency, among others which should be considered and addressed. He noted that ITFC contributes to the capacity-building activities that can help in enhancing the commercial potentials of Saudi Arabia, as well as strengthen the competitiveness of its private sector in the international market to boost economic growth through “need assessment studies.” Such studies can help support and prioritize the development strategy of the country, which in turn can mobilize resources from within and outside the region to meet these needs, he added.
