Saudi economic cities unaffected by falling oil, says CEO

NO DELAY: Plans for six economic cities in Saudi Arabia, including the King Abdullah Economic City, will not be delayed by the global crisis.

A senior Saudi business leader denied on Monday that falling oil prices will hit infrastructure spending and the planned economic cities in the kingdom.

CEO of Saudi economic summit the Global Competitiveness Forum (GCF), Abdulmohsen Albadr, said lower oil prices, which have tumbled about $100 since their peak last summer, will not derail Saudi’s massive push to diversify its economy by building six multi-billion dollar economic cities by 2020.

The cities, currently under construction, will contribute $150 billion to GDP growth and will create 1.3 million jobs, it is estimated.

“The [Saudi] budget for 2009 will have a deficit of around 65 billion riyals ($17.3 billion), but this will never affect the debt of the country because the surplus we made in 2008 will sustain our spending on infrastructure,” Albadr said on Monday.

He stressed there would be no delay or cancellation of the cities.

The country is expected to post a record surplus last year of 590 billion riyals.

In a sign that Saudi is pushing ahead with its plans, King Abdullah announced in November a $400 billion investment and development programme over the next five years.

The GCF, hosted by the Saudi Arabian General Investment Authority (SAGIA) which is marketing the cities, takes place at the end of the month in Riyadh.

Some 1500 delegates, including business leaders and international politicians such as Airbus CEO Thomas Enders and Carlos Ghosn, CEO of Renault and Nissan, will attend the three day summit.

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