Prince Mitab bin Abdulaziz opens Third Global Competitiveness Forum

Saudi Arabia allocates $400 billion for investments in government, oil sectors

Global crisis won’t affect Kingdom’s development: Prince Mitab

GCF panel focuses on climate change, financial crisis, creativity, oil industries

On behalf of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al-Saud, Prince Mitab bin Abdulaziz, Minister of Rural and Municipal Affairs (MOMRA), opened in Riyadh the third Global Competitiveness Forum: "Responsible Competitiveness in a Rapidly Changing World" which ran for three days.

Upon arrival at the venue of the ceremony, Prince Mitab was received by Prince Faisal bin Khaled bin Abdulaziz, Governor of Asir region, Deputy Chairman Board of Trustees of King Khaled Foundation and Chairman of King Khaled Prize, and Amr Al-Dabbagh, Governor of the Saudi Arabian General Investment Authority (SAGIA).

In the opening ceremony, Prince Mitab bin Abdulaziz, delivered a speech in which he said, "On behalf of the Custodian of the two King Abdullah bin Abdulaziz who honored me with opening the third Global Competitiveness Forum on his behalf, it is my pleasure to welcome you in Riyadh."

Prince Mitab stated that Saudi Arabia is continuing in adopting the economic policies necessary to growth of its economy. To ensure this, he stated that he Kingdom continued to implement government investment programs by spending on basic services and projects, and enhancing capacity.

It is estimated that the investment program of government and oil sectors would exceed 400 billion US dollars in the coming five years, he said.

He added that the Kingdom in recent years intensified efforts to boost its investment environment and raise its economy's competitiveness at the international level with constant commitment to providing incentives to investors to choose Saudi Arabia as their business location while maintaining all their rights.

President of Global Competitiveness Forum (GCF) Abdulmohsin Al-Badr delivered a speech at the opening of the ceremony saying that the forum objectives include raising awareness about competitiveness and the challenges facing it locally and internationally; discussion of the topics that relate to the effect of competitiveness on the progress of businesses, international trade, sustainable development, environment, and human resources and the micro and macroeconomic issues directly linked to competitiveness.

Then, Amr Al-Dabbagh, the Governor of the SAGIA, thanked Prince Mitab, and stated that GCF 2009 provides an international forum to crystallize various ideas and views on competitiveness concept by world figures.

He said that the kingdom is determined to occupy its natural and advanced place at the world economic map, raise its competitiveness at the international level and gradually and continuously improve its local and foreign investment environment.

Al-Dabbagh maintained that current and historical experiences show that the kingdom is the safest place for direct investment with high profit and low risks.

Then, the audience watched a show on King Khalid Prize for Responsible Competitiveness.

Participants at the Global Competitiveness Forum (GCF) focused on the current global financial crisis which has affected many countries.

More than 100 leaders and 1,000 delegates from all parts of the globe gathered in the capital to discuss solutions to the global financial crisis under the theme entitled Responsible Competitiveness." The forum sponsored by Saudi Arabian General Investment Authority (SAGIA) also provided foreign participants to get an insight into investment opportunities in Saudi Arabia. Around 20 panel discussions have been scheduled to take place during the course of the three-day forum.

The GCF was founded in 2006 by the SAGIA. It is an annual meeting of top business leaders, international political leasers, and selected intellectuals and journalists, to be held in Riyadh.

Carlos Ghosn, president and chief executive officer of Nissan Motors said that the world is in the middle of a financial crisis which is expected to continue for the next two years. He added that it would continue till the end of 2010. The problem could be gradually overcome provided the countries maintain a regular cash flow in cooperation between the public and the private sector. "Such measures could greatly reduce the impact of the crisis," he stressed. He predicted that oil price would be increased to $80 as the financial crisis improves and such improvement would be conducive to the development of auto industry.

He also said that cash bailout alone will not help a company to come out of the crisis. "Governments must introduce regulations to facilitate such companies to come out of the crisis."

Speaking about the automobile industry in the world, he said that the global car market has been affected a great deal. "During the year 2007, 69 million cars were manufactured and in 2008, the number was brought down to 63 million and in 2009, he predicted that it will be further reduced to 55 million cars."It will be almost 14 percent reduction in 2009, after a 9-percent fall last year, due to the global financial crisis."

Ghosn hoped that auto manufacturers will be in a defensive mode for the next couple of years to cope with the economic meltdown.

"Manufacturers will reduce their investments and inventory as car sales continue to fall." Ghosn noted that the car industry is already under a lot of stress from three sources: The economic recession, the credit crunch and foreign exchange volatility. "The combination of these three factors make the task more difficult," he stressed.

Commending the organizers for organizing such a forum at a time when there is a need for meeting of economic experts to exchange ideas, Airbus Chief Executive Thomas Enders said: "Countries must gear themselves to meet the economic challenges of the time." He predicted that the world demand for new aircraft could plunge 50 to 60 percent in 2009 due to the global economic crunch and tight credit.

Earlier this month, Enders warned that the number of deliveries this year would surpass the number of orders for the first time since 2003.

According to the company’s website, Airbus delivered 483 aircraft in 2008, and won 777 net orders valued at $100 billion.

In July, when oil prices reached record prices, Airbus struck deals to sell eco-friendly passenger jets worth $15.2 billion (9.5 billion euros) to GCC (Gulf Cooperation Council) countries.

In his speech, Mohammad Hassan Omran, chairman of Emirates Telecommunications Corporation stressed on the importance of responsible competitiveness in supporting national economies and encouraging investment in infrastructure and trade.

"Etisalat has been operating responsibly and competitively across the Middle East, Africa and Asia for over 30 years. Developing human resources and operating transparently and in ways which reduce our impact on the environment are key components of our business strategy. This strategy is helping to position Etisalat as a valued participant in the development of economies across the region and also helping us to achieve our ambition to be one of he largest international telecommunication companies in the world," Omran said.

While addressing a press conference in the afternoon, Omran said that his company has been selected as the third mobile operator in Iran.

Answering a question, he said that the company stepped into Iran since the volume of investment was not so huge as in other countries. However, he added that his company believes more on local resources for its businesses than relying on foreign funds.

He noted that the company has got 3G license to operate in Iran. Describing the oil crisis as unhealthy for the global economy, Paolo Scaroni, head of the Italian oil company Eni SpA said that the time has come to look for ways and means to ensure certainty and stability.

Scaroni said that increasing stability requires several issues to be addressed. He said there should be a rapid, precise and transparent global reporting system for production, consumption and inventories.

He called on consumers to "Save energy and use it efficiently." He also pointed out that the world has to concentrate on developing solar energy. "More research should be carried out on developing portable type of solar energy which is renewable too."

In welcoming speakers and delegates to GCF, SAGIA Gov. Amr Al-Dabbagh, commented: "We are delighted to welcome so many highly regarded speakers to GCF 2009. This is our third GCF, and perhaps most important, given the current economic climate. The discussions and speeches at this year’s event will encourage lively debate as to how the World can address the economic downturn which it is currently facing."

"Solutions for the present global crisis can only be offered by governments, which veteran politicians such as former US President Ronald Reagan, had viewed as a clog in the wheel of economy," Stephane Garelli, director of World Competitiveness Center, said while speaking in a work session.

Robert Huggins, director of the Center for International Competitiveness, said he believed that the government regulations would only hamper the global economic progress besides burdening the economic activities with additional cost. In his view the small and medium companies rather than large multinationals, will be the worst affected by the government regulations that would inevitably follow government aid programs.

Former Canadian Prime Minister Jean Chrétien called on the international community to join hands to solve the current issues and learn from the past recessions, particularly when none of the countries in the world is spared from the current crisis.

The Canadian leader pointed out that the absence of trust, a situation created by the conduct of employees in financial markets largely in New York, in London and Zurich. "We need a special program to create jobs, thus have a greater number of taxpayers, as unemployed people cost us a lot," he added.

Aron Cramer, president and CEO of Business for Social Responsibility, warned in his speech about the depletion of the natural resources as a major problem facing the world. "The mankind would need five other planets to meet their requirements at the present rate of consumer growth in the United States," Cramer observed.

"The major ingredient of success for business firms in the year 2020 will be manufacturing products with the least quantity of natural resources," Cramer added.

Commenting on the increasing role of governments in solving the current economic crisis with strict regulations, Cramer said governments in advanced countries, particularly the US government, would employ soft pressure to create changes in the business culture of future days.

He added that large companies are aware of the fact "as the rules of the game have changed in the present world."

Don Thornhill, chairman of National Competitiveness Council of Ireland, emphasized the need for closer global cooperation in enforcing corporate governance and evolving smart systems at national and international levels besides stronger standards for monitoring economic activities and making necessary changes in the employment market.

Other participants at the summit would include business leaders and political figures, including; Shinzo Abe, former Japanese prime minister, Mary Robinson, former Irish president, Mahathir Mohammed, former Malaysian prime minister, Jean Chrétien, former Canadian prime minister, and heads of many international companies.

The Third Global Competitiveness Forum (GCF) started its Session Two on food security.

Discussions on this theme included national competition in world food markets, and the impact of current financial crisis on increase of agricultural production. Nestlé President and CEO Peter Brabeck-Letmathe, said that the food crisis started in 2006, and that it affected 100 million living in poverty and one billion of hungry people all over the world.

President and CEO of Yara International ASA Thorleif Enger the financial crisis caused lower output of fertilizer companies thereby affecting food prices.

The third theme of culture and competitiveness of nations focused on the need to foster arts by government and private institutions and to provide teaching materials for arts in all schooling stages. Saeb Eigner Chairman of the Lonworld Group stressed the need to have building for artworks of various countries. CEO of Redefining Progress James Barret said that economy and art relate to per capita income and individual welfare.

Ex-Irish President Mary Robinson pointed out that illegal immigration from poor to rich countries should be limited by creating jobs and having governments aware of human rights.

CEO for EniSpA attributed oil prices touching 150 dollar per barrel to low output of refineries.

Experts concluded that countries should regulate their use of energy and urge their citizens to be responsible consumers, search for energy sources for mankind in 2050 and thereafter.

The discussions focused on many issues including the infrastructure, competitiveness and environment.

President of King Abdulaziz City for Sciences and Technology Dr. Mohammad Alsawyel spoke on the importance of innovation and invention.

Other speakers talked about technology modernization and economic incentives.

Sessions of the third day of Global Competitiveness Forum (GCF) started with a speech by the GCF guest Professor Michael E. Porter of Harvard Business School and the specialist of competitiveness of nations and regions.

Professor Porter said Saudi economy has to be global, and the Kingdom should use all its natural resources.

He added that the Kingdom does not need funds, rather it needs administrative training and technology brought by foreign investment so that the country can achieve competitiveness.

On advancement of Saudi Arabia's economy, Professor Porter gave encouraging indicators saying that Saudi Arabia has not advanced only in macroeconomics but also in microeconomics striking a balance in achieving both competitiveness and prosperity.

Professor Porter stressed that emerging companies are the leaders of competitiveness process more than major companies. He also pointed out that the sense of initiative in the Kingdom is excellent, and criticized the limited information on companies.

In a press conference, Professor Porter stated that he returned to participation in the forum as he thinks there is a great and exciting transformation in the Kingdom.

Executive Director for ARAMCO Affairs Eng. Khaled Al-Braik has revealed the company's strategies in the development and introduction of creative practices and voluntary works.

He said in his speech at Voluntary Works Forum organized by the Chamber of Commerce and Industry in the Eastern Region that the wise leadership of Saudi Arabia supporting the voluntary efforts has had the most impact on promoting the initiatives of Saudi Aramco for the establishment of practices of voluntary works for 75 years for the benefit of various segments of society.

He explained in detail the company's role in activating the concept of social responsibility through three stages.

Eng. Al-Braik stressed that the company has played pivotal and distinct role in the dissemination of voluntary works, providing opportunities, supporting volunteer works by training and educational practices to raise the level of excellence in line with community needs and aspirations.

Prince Saud bin Abdullah bin Thinayyan Al Saud, Chairman of the Royal Commission for Jubail and Yanbu and Chairman of Board of Directors of Saudi Arabian Basic Industries Corporation (SABIC) has affirmed that investment in the Kingdom of Saudi Arabia has advantages for foreign investors as the effect of the global financial crisis on the Kingdom has been less than other countries.

In a statement on the sidelines of the Third Global Competitiveness Forum, the Prince said, "This does not mean that the Kingdom of Saudi Arabia has not been affected, as the Kingdom is part of the world; but the damage has been relatively less."

He added that this gathering of economic experts and presidents of major companies proves that the Saudi economy is well and that the Kingdom has been able to attract substantial investments, pointing out that investment will be increased as Saudi Arabia compared with other countries, has been less affected by the global financial crisis.

As regards the international credit rating of SABIC, the Prince said that the stability of the evaluation at the same rank shows that the economic position of the company is very good, adding that SABIC in comparison with global major corporations is considered less affected by the global financial crisis as a result of diversification of its investments.

On his part, Minister of Finance Dr. Ibrahim bin Abdulaziz Al-Assaf said that Saudi Arabian General Investment Authority (SAGIA) has exerted major efforts to brief the international community on the Kingdom's competitiveness and advantages in terms of foreign investment, indicating this has been evident in the advancement of the rank of the Kingdom at the International Competitiveness.

He pointed out that General Investment Authority aims to reach one of the world's top ten positions at the end of 2010.

Dr. Assaf said that the figures of General Statistics and Information Department showed a gradual decrease in inflation rates last November, and he expected that inflation will continue to decline for reasons including a decrease in commodity prices around the world.

Dr. Al-Assaf said, "While the world is going through a financial crisis, the timing of this forum is excellent as one of the most essential elements of competitiveness in any country is the financial stability as a whole".

He said, "When we look at countries of the world and compare the Kingdom's economy with the economies of these countries, we find ourselves among the best countries in the world with regard to the general budget of the state and the large reserves that support economic growth.

Economists in the Kingdom in general and the Mideast region in particular asserted that the three-day International Competitiveness Forum starting came up with meaningful solutions to the global economic meltdown.

Over 100 speakers participated in the forum. They include several heads of state, ministers and presidents and CEOs of large companies as well as leading intellectuals from the world over. Most prominent among them are Carlos Ghosn, Chairman of the Board of Directors and Director General of Nissan, Mary Robinson, former Irish president, Jean Chrétien, former prime minister of Canada, Michael Porter, professor at Harvard Business School, Shinzo Abe, former prime minister of Japan, and Mahathir Muhammad, former prime minister of Malaysia.

The participants discussed crucial themes on the local and international economy.

On the first day of the forum in the "Responsible competitiveness" session, the participants discussed the concept of competitiveness and the role of responsible investments in improving the competitiveness of countries.

There were four speakers including Muhammad Omran, Chairman of the Board of Directors of Saudi Telecom Company (STC).

This is followed by a session on "Energy and its horizons" to discuss the impact of the financial crisis on energy affairs. There will be five speakers including Nick Butler, Chairman of the Board of Directors of Cambridge Center for Energy Studies and Paulo Scaroni, Executive President of Eni SpA.

The session on "Food security" discussed supporting competitiveness of countries in the long run and the current food crisis.

There were four speakers including Abdullah Zainal, Minister of Commerce and Industry, and Peter Brabek-Letmathe, Executive President of Nestle Company.

The session followed by "Culture and competitiveness of nations," which will have four speakers including Saeb Egens, Chairman of the Board of Directors of Lonworld Investments Group and Michael Kaiser, President of the John F. Kennedy Center for the Performing Arts.

The second day, the first session under the title "Toward a more competitive public sector" discussed the effects of bureaucracy on competitiveness.

The speakers including Heizo Takenaka, a former Japanese minister and Sri Aziz Yousuf, Malaysian Minister of International Trade and Industry.

This is followed by a session on "Infrastructure as an economic catalyst." The four speakers of the session include Ralph Peterson, Chairman of the Board of Directors of CH2M HILL and Bruno Lavon, Executive President of Lafarge Company.

There were five speakers in the "Competitiveness and environment" session and participants discussed the effects of climate change on companies and countries.

The session on "The next generation of creativity and innovation" tackled the capability of nascent economies to accommodate creativity and innovation. There will be four speakers.

The final session on the second day titled "Global risks in 2009" discussed the dangers of collapse that can face the global economy in the current year and the impact of the financial crisis.

On the last day of the forum, the first session titled "The 21st century leaders" had four speakers.

The session titled "Towards a different way of thinking" discussed how to support mentalities and ways of thinking for economic advancement.

The final session of the forum was held under the title "The financial crisis - its depth and period and solving it."

Deputy Governor of the Saudi Arabian Monetary Agency (SAMA), Dr. Mohammad bin Suleiman Al-Jasser presented at the Global Competitiveness Forum (GCF), solutions to address the global financial crisis, topping is the infusion of large amounts of cash money into the banks so that they could be able to resume its activities.

He said "We worked in the kingdom on pumping the liquidity into the banks after undertaking control measures by SAMA, pointing out that policies in the future have to be more restricted through more tight government.

The session's discussions have included how to avoid similar crises in the future and the impact of the current financial crisis on the development of emerging markets in addition to the ability of the Kingdom of Saudi Arabia to benefit from the global financial crisis.