(MENAFN - Arab News) The private sector is a key partner in the national development of a country and the Kingdom has been exerting all its efforts to harness the benefits of public and private sector partnership for the good of the country. This was stated by Finance Minister Ibrahim Al-Assaf while opening the Private Sector Middle East Conference held at the Council of Saudi Chambers (CSC) on Tuesday.
Four key organizations have joined under one umbrella to organize this global economic event, which is considered the first of its kind in the Middle East. They include the Ministry of Finance, International Monetary Fund (IMF) and International Finance Corporation (IFC) aside from the CSC.
Abdullah Al-Mobty, chairman of the CSC; Dimitris Tsitsiragos, vice president for Europe, Central Asia, Middle East and North Africa regions, IFC; and Min Zhu, deputy managing director, IMF, also addressed the packed gathering of local and international delegates.
Speaking on the economic challenges facing the region and the private sector's contribution, the minister said despite the implementation of economic reforms and support given for the private sector in the region, the role of the private sector, was still modest and the volume of investments small and not up to the expectations.
"Many countries have adopted policies to support the participation of the public and private sectors, and small and medium enterprises (SMEs), which enjoy great care and benefits from their respective countries.
Al-Assaf said the private sector in the Kingdom had played a significant role in its national development. "It has contributed SR700 billion, 58 percent of the GDP, toward various businesses.
Last year, he said, the private sector provided jobs for some 250,000 people, totaling its strength of employees to one million. Private sector has invested around SR314 billion in the Kingdom, the minister added.
About incentives, the minister said the Kingdom has created a conducive climate for successful partnership between the public and private sectors. "We are introducing judicial reforms, new mortgage law has come into force and lands are being provided for industrial developments," he noted.
Commending the unprecedented enthusiasm displayed by the Middle East countries to promote private sector participation, Zhu said there was a need for stability in its growth rate.
He pointed out that there is a strong need for more private sector participation in the region to trigger economic developments. The Kingdom has made remarkable progress in attracting private sector participation which is proven by its economic stability.
Encouraging private sector would create more job opportunities for the people, he said, adding that such active private sector involvement would attract investments from the region as well as from other countries on the globe.
About the Kingdom's growth, he said it had dropped to 3.6 percent this year from 5.1 in the previous year. "The cause of this decrease is due to slower output of oil. "We expect this to increase next year to 4.4 percent with increased oil production," he added.
The Kingdom's inflation remains in check at 3.6 percent, while the government budget still remains surplus of 9.6 percent during the current year, he added.
He also pointed out that 60 percent of the Kingdom's population is between 14 and 65 years of age. The main challenge is to find job opportunities for this group," he noted, adding that there are plenty of resources in the region to attract local and foreign investments.
Tsitsiragos stated that the investors in the Gulf region play an important role in the development of retail , infrastructure and communications.
The first scientific session on the role of macroeconomic and financial policies in private sector development was chaired by Hamad Al-Bazie, vice minister of finance, Ministry of Finance.
The other speakers included Alfred Kammer, deputy director, Middle East and Central Asia Department, IMF; Abdulmohsen Al-Fares, CEO of Alinma Bank; Michael Grifferty, president of The Gulf Bond and Sukuk Association (GBSA); and Talat Z. Hafiz, secretary general, Media & Banking Awareness Committee, Saudi Banks.