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Dollar-riyal peg will continue: SAMA governorn

By P.K. ABDUL GHAFOUR JEDDAH: Education Minister Prince Faisal bin Abdullah on Tuesday emphasized the strong Saudi-US partnership and called for expanding cooperation between the two allies into new areas, especially education and human resource development.

Addressing the Saudi-US Business Forum in Atlanta, Georgia, Prince Faisal said the Kingdom was currently focusing on developing a knowledge-based economy and investing in new generations to realize Custodian of the Two Holy Mosques King Abdullah's vision.

Meanwhile, Saudi Arabian Monetary Agency ( SAMA ) Gov. Muhammad Al-Jasser told the forum that Riyadh has no plans to change its currency's peg to the US dollar, adding that the tie remains a priority due to the Kingdom's trade with the United States.

"It's cold-blooded self-interest that keeps us pegged to the dollar at this point in time (due to the importance of oil exports and other economic ties)," Al-Jasser told the forum attended by about 500 government officials and business leaders from both countries.

The SAMA chief also urged a prompt resolution of Europe's debt crisis, saying the situation there "is a wake-up call for prudent fiscal management." He said Saudi Arabia is moving to implement Basel III reforms, and noted that the Kingdom's banking system is the least leveraged in the region.

While Al-Jasser said the peg will remain for the short term, he also said the global monetary system should prepare to accommodate a new reserve currency in addition to the US dollar. He emphasized the need to adopt an effective financial system to achieve global economic stability.

Delivering the keynote speech at a plenary session on "Education: Investing in Human Capital," Prince Faisal underscored the remarkable progress achieved by the Kingdom in education within a short span. "We have sent more than 130,000 Saudis abroad for higher education under the King Abdullah Foreign Scholarship Program," the minister pointed out.

Saudi Arabia has given utmost importance to education and manpower training and an estimated 51 percent of the $385 billion budget for the Kingdom's 9th Development Plan will be spent on human resources development through to 2013.

Prince Faisal, who is heading an impressive 250-member delegation of government officials and business leaders to the forum that began on Monday, highlighted the government's efforts to promote science and technology and develop the capabilities of gifted Saudi men and women by giving them all support and encouragement.

"The number of students and schools double in the Kingdom after every 10 years," Prince Faisal said, adding that there are now more than 33,000 schools with over five million students. The Saudi government has been allocating about $42 billion in the national budget for education, manpower, and human resources development since 2000, he said. The figure amounts to more than a quarter of the total budget.

Saudi Arabia's development drive in education and manpower training offers a lot of investment opportunities for American educational institutions and companies. At present more than 38,000 Saudis are studying in US institutions under the King Abdullah Foreign Scholarship Program.

Addressing the forum, Atlanta Mayor Kasim Reed brought the attention of Saudi businessmen to investment opportunities in Atlanta, which hosts the headquarters of major US companies. "The universities in Georgia have given admission to a large number of Saudi students," he pointed out.

Fahad Al-Mubarak, chairman and managing director of Morgan Stanley, Saudi Arabia, spoke at a session on "Maintaining a Stable Global Financial System: Shared Responsibility." He said Saudi Aramco's huge investments in the petroleum industry would ensure global energy stability. He also referred to the Kingdom's contributions to the World Bank, International Monetary Fund and Islamic Development Bank.

US Ambassador to the Kingdom James B. Smith said the Kingdom's ongoing diversification drive would contribute to solving the country's unemployment and housing problems. He said the Saudi government's readiness to address major issues has contributed greatly to strengthening the Kingdom's stability.

The three-day forum aims to attract US investments to key Saudi projects in the vital sectors of education, energy, electricity and water, transport and logistics, petrochemicals and information technology.

Already the largest economy in the region and a key member of the G20, Saudi Arabia is undergoing an extraordinary economic boom. Massive public investment, rapid private-sector growth and new sector initiatives are driving an expansion projected to offer more than $1 trillion in trade and investment opportunities over the next decade.

During this period of severe global economic downturn and historic social and political upheaval across many regions including the Middle East, Saudi Arabia remains a stable and reliable partner. It is not only the regional economic powerhouse but also a leading voice for moderation and dialogue among Arab states and the Islamic world.

© Arab News 2011