SAGIA chief says global crisis has had 'positive impact'

The governor of the Saudi Arabian General Investment Authority (SAGIA) has claimed that the global economic crisis has had a "positive impact" on plans to build multi-billion dollar Economic Cities in the kingdom.

Amir Abdullah Al Dabbagh said the downturn had "created opportunities" and had reduced the cost of building the four economic cities, through falling prices of raw materials.

In an interview with CNN, he added: "We believe that the global economic slowdown is presenting lots of opportunities. Had you asked me six months back, what are the main challenges facing these economic cities and these mega-projects, I would have said skyrocketing prices of building materials, lack of capacities of construction contracting companies, lack of equipment, lack of human capital.

"All these opportunities have disappeared. Today, we are accelerating the construction of these cities to take advantage of the depressed prices of building materials."

Asked about the depressed oil price which has fallen dramatically from record highs of $147 in July 2008, the governor said: "Saudi Arabia does not make its economic policy and economic plans based on today’s prices of oil.

"For instance, in 2009, despite the fact that oil prices lost over 50 percent of its peak value, still we increased our spending by 19 percent."

Saudi's King Abdullah announced at the G-20 summit in Washington that the kingdom would spend $400 billion on infrastructure development over the next five years.

"So, we aren’t linking our economic policies to the fluctuation or to today’s oil prices. Saudi Arabia, as you know, has significant international reserves, mostly invested in fixed income. And these reserves we tap into at the time of depressed oil prices," he added.

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