BIGGER IS BETTER
By Sarah Abdullah • Jul 21st, 2009Saudi Arabia isn’t immune from the global downturn, and is making
changes to manage its future growth.
The official line in the kingdom is that everything is going well. As early as last October, two months before the release of the government’s 2009 budget, the Saudi Arabian Monetary Agency (SAMA) and other governmental entities were busy doing press conferences and interviews in the hope of getting the word out that Saudi Arabia’s economy hadn’t slipped into recession, despite the onset of the global financial crisis.
But those statements also acknowledged that the country isn’t immune from the crisis, either. “Saudi Arabia’s economy and financial institutions will not be greatly affected by the global financial crisis as they have not been exposed to the international financial institutions that faced problems in recent times,” Mohammed al-Jasser, then deputy governor and current governor of SAMA told the Saudi Press Agency (SPA).
Al-Jasser added that the Saudi economy has never witnessed liquidity problems, and refuted international reports that SAMA had pumped $2 billion to $3 billion in deposits into the kingdom’s banking system in order to ease liquidity pressures.
In January at the World Economic Forum, Saudi Arabia’s banking chief Hamad Saud al-Sayyari reiterated that the country is not in recession, and said the 2009 budget had been drawn up to counteract the decrease in oil prices.
A month later, King Abdullah bin Abdulaziz, Saudi Arabia’s monarch, reshuffled his cabinet and made al-Jasser SAMA’s governor, removing his longstanding predecessor, which caused speculation about whether or not the Saudi economy would take a new tack or remain on its present course.
