November 5, 2004

THE CUSTODIAN OF THE TWO HOLY MOSQUES RECEIVES THE 40TH ANNUAL REPORT OF THE SAUDI ARABIAN MONETARY AGENCY (SAMA). THE SAUDI NATIONAL ECONOMY IS MAKING GREATER PROGRESS THAN IT DID IN THE PRECEDING YEARS. THE CROWN PRINCE RECEIVES A MESSAGE FROM THE MOROCCAN KING. PRINCE NAIF IBN ABDUL AZIZ STRESSES THE DETERMINATION OF THE KINGDOM TO UPROOT TERRORISM. PRINCE SALMAN HEADS THE MEETING OF AL BIR SOCIETY AND DONATES SR ONE MILLION. The Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz has received the 40th annual report of the Saudi Arabian Monetary Agency (SAMA). The report was presented to the Monarch by SAMA's Governor Hamad Al-Sayari during an audience at Al-Yamamah Palace. During the meeting, Al-Sayari delivered a speech reviewing the most prominent domestic economic developments in the Kingdom during fiscal year 1423/24 H. (2003G) and also the developments so far in the current fiscal year 2004. In his speech, Hamad Al-Sayari said: "Custodian of the two Holy Mosques: It gives me great pleasure to present the fortieth annual report of the Saudi Arabian Monetary Agency. The report reviews the most prominent domestic economic developments in the Kingdom during fiscal year 1423-24 (FY2003) and also the developments so far in the current fiscal year 1424-25 (FY2004). During FY2003 (1423-1424) the national economy continued to make good progress, for the second consecutive year. The nominal GDP grew by 13.7 percent compared to 3.0 per cent in the preceding year. This was attributable to the improvement in crude oil prices and expansion in private sector activity which increased by 4.4 percent. This growth was accompanied by remarkable improvement in the State Budget which recorded a surplus of SR 36 billion [U.S. $9.6 billion] compared to a deficit of SR 20.5 billion [$5.5 billion] in the preceding year. This was the result of rationalization of expenditures and improvement in revenues, including non-oil revenues. The balance of payments denoted a surplus of SR 111.2 billion [$29.7 billion], the highest figure in over two decades, compared to a surplus of SR 44.5 billion [$11.9 billion] in the preceding year. These positive developments were achieved in an environment characterized by domestic price stability, with the general cost of living index growing by only 0.6 percent. Indicators such as these reflect the strength of the Saudi economy and its capacity to overcome the negative effects of the crises witnessed by the region, as well as the malicious terrorist explosions that have occurred in our dear country, that were aimed at undermining its social and economic stability and security. During the current year, the national economy is making greater progress than it did in the preceding years in view of the current levels of crude oil prices, the continued expansion of private sector activity, and the continued improvement and development of the local investment environment. This development would not have been possible without the concerted efforts of both leadership and state officials. Custodian of the Two Holy Mosques: In pursuance of the Kingdom's ceaseless efforts to achieve sustainable economic development consistent with available resources and capable of confronting current and future challenges, your government continued throughout 2003 and during the current year to take a number of important decisions in the area of restructuring the national economy and updating laws. Also, the specialized councils took a number of decisions that contributed to supporting economic development. The Kingdom has made good progress towards accession to the World Trade Organization (WTO). These sincere efforts will contribute to enhancing the role of the private sector in the national economy, diversifying the economic and production base, and increasing job opportunities. The Kingdom's oil policy has, since its foundation, constantly sought to meet world demand for crude and to achieve stability in global oil markets at favorable prices for the interests of both producing and consuming countries. Since mid-2004, oil prices have risen to relatively high levels despite the availability of sufficient oil supplies to meet world demand. The rise in oil prices was due to a number of factors beyond the control of OPEC. The high levels of oil prices are, however, contributing to enhancing the Kingdom's oil revenues during the current year. A surplus in the State Budget is anticipated, and the bulk of this, as his Royal Highness the Crown Prince pointed out in an interview with the Saudi Press Agency, will be directed towards the repayment of the public debt. The remainder will be utilized to support diversification of the economic base and development of human resources, by increasing the capital of the Real Estate Development Fund and the Credit Bank, in addition to raising budgetary appropriations for the annual State Budget and allocating SR 30 billion [$8 billion] for the socio-economic sectors that directly affect the daily life of citizens in the various parts of the Kingdom. I would like to stress that this endeavor to amortize the public debt will have a positive impact on the Kingdom's public finance position and macro-economic stability. I would also like to praise the efforts aimed at consolidating the State Budget and restoring the balance achieved in the previous year through rationalizing and scheduling public expenditures. These efforts have enhanced the achievement of positive results in amortizing the public debt and have had their impact on boosting the progress of comprehensive economic development. Custodian of the Two Holy Mosques: In the successive five-year development plans, your government has paid considerable attention to the diversification of the economic base as a strategic option to achieve sustainable growth and stability in various sectors of the economy and gradually reduce reliance on oil as an important source of income and wealth. Marked achievements have been made in this area. The contribution of the non-oil sector to the GDP has increased, with non-oil exports and other revenues having risen notably. Manufacturing industries and agricultural production have developed. However, the accelerated economic and social development witnessed by the Kingdom requires acceleration of efforts aimed at increasing the private sector's contribution to economic activity. This is made possible by achieving balanced growth in various economic sectors, promoting and developing industries and small and medium enterprises, developing Saudi cadres, improving the climate and environment of domestic and foreign investment and accelerating the activation of privatization programs. Custodian of the two Holy Mosques: The employment of young Saudis is one of the most prominent challenges facing the national economy and the Kingdom's decision makers. The challenge arises from many factors, such as the high rate of population growth, especially in the younger groupings, as well as the massive recruitment of foreign manpower, and the slow pace of compatibility of education and training curricula with the demands of the market. The Kingdom has succeeded in the Saudization of most government jobs and for a few years now has been gradually Saudizing jobs in the private sector. However, the results achieved so far do not yet meet with the cherished ambitions. Therefore, current efforts need to be intensified to set a long-term strategy for investment in human resources with the effective participation of both private and public sectors. Essential regulations for maintaining the rights of employees and employers need to be in place, and recruitment of foreign manpower needs to be rationalized. Furthermore, spending on human resources development projects and programs should be increased. The general technical and professional education programs should be streamlined, and the capacity of specialized institutions and colleges and universities needs to be expanded. Young people also need to be educated in the importance of respecting professionalism and discipline in work. The government's wise decision of establishing an independent Ministry of Labor, and increasing job opportunities and areas of work for women, have certainly highlighted the government's determination to find suitable and effective solutions for these challenges. Custodian of the two Holy Mosques: It is a great pleasure for me to extend my congratulations to you on the issuance of the royal decree constituting the Capital Market Authority Board, a complementary step to the Capital Markets Law previously approved by the Council of Ministers. These decisions will contribute to the restructuring of the stock market to operate on new and more developed foundations. This will create and expand effective instruments for investing savings, and provide a regulatory framework for the implementation of all activities related to the security market, increasing its depth and enhancing its level of transparency. As a result of several factors, the share price index rose by 76.2 percent during 2003 and by 48.6 percent during the first nine months of this year. This will enhance the confidence of investors in the market and in the domestic economy. I would like to avail this occasion to call upon investors, especially new investors, to be fully aware of the sound foundations and principles of investment in stock companies and to be aware of the fluctuations from which security markets all over the world often suffer. Custodian of the Two Holy Mosques: In conclusion, let me review briefly the latest salient monetary and banking developments. The Kingdom's monetary policy has continued to maintain the stability of the national currency and domestic prices, and to ensure the soundness and strength of the domestic monetary and banking systems. This stability is an essential prerequisite for supporting economic growth. During the first nine months of 2004, money supply went up by 9.7 percent, and bank deposits increased by 11.1 percent. Commercial bank claims on the private sector rose by 27.5 percent. Moreover, banks enhanced their capital base, developed their banking services and intensified their use of modern technology. This contributed to an increase in their profits and a high solvency of 17.8 percent compared to the 8 percent prescribed by the Basel Committee. Furthermore, the Council of Ministers has issued its approval for a number of Gulf and international banks to open branches in the Kingdom, after ensuring the strength of the banking sector and its capability to accommodate new banks and cope with strong competition in providing modern and sophisticated financial and banking services. May God bless you and guide your path to greater prosperity. The Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz received at his office at Al Yamamah palace in Riyadh Abdul Rahman Ibn Hamad Al-Atiyyah, the Secretary General of the GCC, and the ambassadors of the GCC countries accredited to the Kingdom. In addition to Saudi Arabia, the GCC is made up of Bahrain, Kuwait, Oman, Qatar and United Arab Emirates. The ambassadors congratulated the Custodian of the Two Holy Mosques on the holy month of Ramadan. On his part, King Fahd sent his greetings to the Emirs and presidents of the GCC member countries, wishing them comfortable and blessed fasting. The audience was attended by Prince Abdul Rahman Ibn Abdul Aziz, Deputy Minister of Defense and Aviation and Inspector General; Prince Abdul Aziz Ibn Fahd Ibn Abdul Aziz, Minister of State, Member of the Cabinet, and Chief of the Court of the Cabinet's Presidency; and senior protocol officials. The Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz received at Al-Yamamah Palace in Riyadh the former Lebanese Prime Minister, Rafiq Al-Hariri who came to greet the Monarch on the occasion of the blessed month of Ramadan. The audience was attended by Prince Abdul Rahman Ibn Abdul Aziz, Deputy Minister of Defense and Aviation and a number of princes and senior officials. Meanwhile Crown Prince Abdullah Ibn Abdul Aziz, the Deputy Prime Minister and Commander of the National Guard, received at his office at the royal court at Al-Yamamah palace in Riyadh Abdul Rahman Ibn Hamad Al-atiyyah, the Secretary General of the GCC and the ambassadors of the GCC countries accredited to the Kingdom. Later, Crown Prince Abdullah received a message from King of Morocco Mohammed VI. The message was conveyed by the Moroccan Ambassador to the Kingdom Abdul kareem Al-sammar. Crown Prince Abdullah also received Ambassador Omar Diawara, the dean of the Diplomatic corps and other deans of diplomatic groups accredited to the Kingdom. They were the deans of the Arab, Asian, South American, African, European, Atlantic, and North American groups. The ambassadors conveyed to Crown Prince Abdullah the greetings and congratulations of the kings, heads of state, Emirs and leaders of the Arab, Gulf, Islamic and friendly countries on the holy month of Ramadan. On his part, Crown Prince Abdullah sent his greetings to them, wishing Arab and Islamic nations comfortable and blessed fasting. The audiences were attended by Prince Abdul aziz Ibn Abdullah Ibn Abdul Aziz, Advisor at the Crown Prince's Court, Prince Bandar Ibn Salman Ibn Mohammed Al Saud, Advisor at the Crown Prince's Court; Prince Abdul Aziz Ibn Fahd Ibn Abdul Aziz, Minister of State, Member of the Cabinet, and Chief of the Court of the Cabinet's Presidency; and senior protocol officials. On the other hand Prince Sultan Ibn Abdul Aziz, the Second Deputy Prime Minister, Minister of Defense and Aviation and Inspector General, received Prince Fahd Ibn Abdul Aziz Ibn Fahd Al-Faisal Al-Farhan Al-Saud, the Deputy Chairman of the Board of Directors of the International Al-Faisal Academy. Prince Fahd Ibn Abdul Aziz Ibn Fahd Al-Faisal delivered to Prince Sultan the Golden Record of the Academy and a photographed English dictionary. He also briefed Prince Sultan on the role of the Academy in preparation of the youth for the labor market. Prince Sultan Ibn Abdul Aziz, the Second Deputy Prime Minister, Minister of Defense and Aviation and Inspector General, left Riyadh for Al-Madinah Al-Munawarah. At Riyadh Airbase, Prince Sultan was seen off by Prince Fahd Ibn Mohammed Ibn Abdul Aziz; Prince Bandar Ibn Mohammed Ibn Abdul Rahman; Prince Naif Ibn Abdul Aziz, the Interior Minister; Prince Salman Ibn Abdul Aziz, Governor of Riyadh Region; Prince Khalid Al-Faisal, Assir Region Governor; Prince Sattam Ibn Abdul Aziz, the Deputy Governor of Riyadh Region ; other princes and number of senior civil and military officials. In Riyadh Prince Naif Ibn Abdul Aziz, the Interior Minister , patronized a party held in honor of the retired employees of the Interior Ministry and its security organs. Speaking the occasion, Prince Naif highlighted those who dedicate their efforts in the service of their religion and country, and deplored those who betrayed their religion and country. He urged Ulema (the Muslim scholars) to work for correcting wrong concepts and deviated ideas. 'Along with the security authorities, all other concerned authorities should work for the containment of sedition' he said noting that the ongoing arrangements to organize a conference for combating terrorism in the Kingdom has provided a clear evidence for the Kingdom's determination on uprooting terrorism. Prince Naif Ibn Abdul Aziz reiterated the readiness of the security men to sacrifice their lives for the sake of their religion and country. Later, Prince Naif awarded memorial shields to the retired employees. The party was attended by a number of princes and senior officials. Also in Riyadh Prince Salman Ibn Abdul Aziz, Governor of Riyadh region and Chairman of the board of directors of Al Bir Society received at his office at Kasr Al Hokm officials and members of the board of directors of Al Bir Society, in the presence of Prince Sattam Ibn Abdul Aziz, Deputy Governor of Riyadh region and Deputy Chairman of the board of directors of Al Bir Society. The meeting was also attended by the Grand Mufti of Saudi Arabia and Chairman of the Senior Ulema [Religious Scholars] Sheikh Abdul Aziz Al-Al Sheikh, Princes and officials. Prince Salman Ibn Abdul Aziz, Governor of Riyadh region praised the members of the board for their efforts in the service of needy people in the Kingdom. Prince Salman said that Riyadh has many societies, in addition to the late Sheikh Abdul Aziz Ibn Baz society to help those in need to get married and provide them with housing. He stressed that all those charities enjoy the care of the Custodian of the Two Holy Mosques King Fahd Ibn Abdul Aziz, his entrusted Crown Prince Abdullah Ibn Abdul Aziz, Deputy Prime Minister and Commander of the National Guard and Prince Sultan Ibn Abdul Aziz, Second Deputy Prime Minister, Minister of Defence and Aviation and Inspector General, as well as the state and the Ministry of Social Affairs. Prince Salman praised the response of the citizens and their help to those in need. He said that all the governorates of Riyadh region have branches of Al Bir society and each city has a branch of the society as well. The meeting also discussed the new budget of the Society and issued a number of administrative decisions. Prince Salman Ibn Abdul Aziz, Governor of Riyadh region and Chairman of the board of directors of Al Bir Society, then announced a donation of SR One million to the society. On the other hand Prince Salman Ibn Abdul Aziz, the Governor of Riyadh Region, has received at his office in Riyadh Sheikh Salih Ibn Abdul Rahman Al Hussein, Chairman of the National Dialogue Forum and Faisal Ibn Abdul Rahman Ibn Mu'ammar, the Secretary General of King Abdul Aziz Center of National Dialogue. During the meeting, they briefed Prince Salman on the outcome of the final round of youth workshops organized by King Abdul Aziz Center for National Dialogue in preparation of the 4th National Dialogue Forum scheduled for the Eastern Region in the second week of December 2004 under the title "Youth Issues: Reality and Expectations". On his part, Prince Salman lauded the role of the center in the service of the nation and its strenuous endeavor to spread the culture of dialogue and exchange of opinions according to Islamic principles which call for moderation and reject extremism. Later, Al-hussein and Ibn Mu'ammar visited Prince Sattam Ibn Abdul Aziz, Deputy Governor of Riyadh Region, to brief him on the same issue. In Washington Crown Prince Abdullah's Foreign Affairs Adviser Adel Al-Jubeir took strong exception to statements made by Senator Bob Graham on CNN's Late Edition with Wolf Blitzer last Sunday in which the Senator alleged that it is a "...fact that the Saudi Arabians are providing much of the financing for the insurgents in Iraq..." and that Saudi Arabia "...is a country which was a disingenuous ally during September 11, [that] has continued to take steps that are adverse to our interests in Iraq, Afghanistan and other places around the world." Mr. Al-Jubeir had the following response to the Senator's comments: "Senator Graham has had a distorted view of the Kingdom's role in the war on terrorism for some time now, and it is becoming increasingly evident that he refuses to acknowledge reality when it is so clearly before him. First, he chaired a Congressional inquiry into the 9-11 events, which was characterized by grandstanding and theatrics rather than reality and fact. Then, when the findings of that inquiry relating to Saudi Arabia were debunked by the 9-11 Commission this past summer, he did nothing to correct the record or acknowledge lapses in his inquiry's investigation. Instead, he went further, and published a book re-hashing the same arguments already discredited by the 9-11 Commission. These are not the actions of a true statesman, but the irresponsible actions of a person seeking political gain at the expense of the truth. At a time when the civilized world is looking for ways to confront evil threatening its citizens, politics should be cast aside, and hands joined together to defeat evil. "The truth is that the Kingdom is fighting terrorists, those who support them and those who condone their actions. We do so with vigor because they represent a threat to our citizens and residents. The Kingdom has arrested hundreds of suspects, questioned thousands of others, killed or captured Al-Qaeda members, seized arms caches, and regulated its charities and financial system to ensure that no evil-doers can take advantage of the generosity of our citizens or abuse our financial systems. These new regulations have been attested to by the G-8's Financial Action Task Force. "We have also gone after those who incite violence, whether in the Kingdom or in Iraq. We have no choice but to act, because anyone who incites or funds or undertakes violence in Iraq is likely to do so in the Kingdom. And we cooperate closely with a number of countries, including the U.S., in this area. The steps we have taken were made public, and the U.S. and other governments are fully aware of them. But apparently not Senator Graham, who continues to make outlandish and unsubstantiated allegations about Saudi Arabia. "With regard to Afghanistan, the Kingdom is proud of the role it has provided in supporting the unity and reconstruction of the war-ravaged country by providing one of the largest humanitarian assistance programs by donor countries, including material assistance to the Afghan people, and loans and grants to the Afghan government, to ease the suffering of its people. If alleviating the suffering of the innocent Afghan people and supporting the emergence of a viable Afghan government is regarded as adverse to American interests, when America is encouraging other nations to do the same, then Senator Graham must be out of touch with the reality of his nation's foreign policy priorities. "Senator Graham's distinguished history as a Governor and a Senator leads me to believe that he is motivated by election year politics, and not by beliefs which are clearly wrong." In Belgium, Belgian authorities said last Tuesday they had arrested one of the most wanted men in Saudi Arabia, where security forces have been fighting an insurgency by al Qaeda militants for over a year. The federal prosecutor's office said it had been holding Moroccan Hussein Mohammad al-Heski on suspicion that he belonged to a terrorist group and had been planning an attack in Belgium. "It is clear that he was up to something but there was no specific target," office spokeswoman Lieve Pellens said. Pellens said Heski had been detained in July, but declined to elaborate on the circumstances of his arrest. A Belgian judge is due to give a verdict on Friday on 10 people being tried for illegal possession of firearms and other charges, some of them linked to a foiled plot to bomb Strasbourg's Christmas market. Most of the defendants are suspected to have ties to radical Islamist groups whose members were trained in Afghanistan to carry out attacks in Europe. Although Heski is one of Saudi Arabia's 26 most wanted militants, officials are focusing on crimes he might have committed in Belgium. Little is known about Heski, but he has been described by Saudi analysts as a "field combatant". His detention brings to 17 the number of militants on the list who have surrendered or been either captured or killed by Saudi Arabian security forces. More than 150 people have been killed in militant attacks and clashes with Saudi security forces.