Saudi Arabia to host 27th Annual Meeting of the InterAction Council

Made up of more than 30 prominent past heads of state and government, the council meeting is a hotbed for debate on leading global political and economic issues.

Headlining the agenda at this year's event will be the debate on 'Energy Availability and Economic Growth', both highly relevant topics given Saudi Arabia's continue investment in King Abdullah's Economic City, one of the biggest and most important developments spearheading the country's diversification away from oil.

The event will welcome former heads of state including Helmut Schmidt (former Chancellor of Germany), Ingvar Carlsson (former Prime Minister of Sweden), Romano Prodi (former Prime Minister of Italy) and Jean Chrétien (former Prime Minister of Canada).

Established in 1983, the IAC is an independent international organization designed to mobilise the experience, energy and international contacts of a group of distinguished statesmen and women to explore and recommend practical solutions for the political, economic and social problems confronting humanity.

IAC has chosen to meet at King Abdullah Economic City (KAEC), one of six new economic cities initiated since 2005 by the Saudi Arabian General Investment Authority (SAGIA) under the direction of HM King Abdullah bin Abdulaziz Al Saud, Custodian of the Two Holy Mosques. By 2020 the development of the economic cities aims to contribute more than $250bn to Saudi GDP and to create more than 1.3 million jobs for Saudi Arabia's growing young population.

KAEC and the five other new economic cities (four of which have already been launched) reflect SAGIA's goal to position Saudi Arabia amongst the world's top ten most competitive nations by 2010, achieving rapid and sustainable economic growth and diversification based on the Kingdom's competitive strengths as the global capital of energy and a major hub between East and West.

The master developer of KAEC, Emaar the Economic City (EEC) - a publicly listed company on the Saudi stock exchange, led by the Dubai property developer Emaar, has already signed statement of interest with international companies including Mars (which will build a chocolate factory) and Total (which is to build a lubricants plant).

The Kingdom is investing massively in both infrastructure and reform to enhance its value proposition to foreign businesses. To project KSA's capacity for international economic cooperation, SAGIA has set up a series of overseas offices, many of which are staffed by women, putting the Authority closer to its goal of achieving 50% female staff by 2010 to signal the changes under way in Saudi Arabia.

Fifty-seven per cent of KSA's population is under 25 and, recognizing that this is its greatest potential asset, the Saudi government is the world's eighth highest spender on education with the aim of encouraging inward investment from foreign companies and overcoming a looming employment shortage.

Since Saudi Arabia joined the World Trade Organization in 2005 many sectors of the economy have opened to foreign investment and, according to the World Economic Forum's latest Global Competitiveness Report (October 2008), Saudi Arabia's position has risen from 35th to 27th out of 134 countries, ahead of the UAE (31st), Spain (29th), Italy (49th) and fast-growing emerging markets such as China (30th), India (50th), Russia (51st) and Brazil (64th).

According to the International Monetary Fund (October 2008) the Saudi economy grew by an average of 4.3% during 2003-2007, driven by continued rapid expansion in the non-oil private sector (in particular, financial and construction services). In the same period non-oil private sector expansion averaged 5.4%, leading to substantial job creation.

The Gulf is not immune to the impact of the global financial crisis and in February 2009 the IMF indicated that the decline in oil prices and OPEC production will slow GDP growth for the region to around 3.5% in 2009, compared to 6.8% in 2008. Although oil export receipts for the economies of the Middle East, North Africa, Afghanistan and Pakistan (MENAP) are projected to drop by almost 50% over the year, implying $300bn less revenue, the strength of countries such as Saudi Arabia will allow it to sustain expenditure and contribute substantially to supporting global demand and economic stability during the downturn.