Interview with Saudi Arabia's Finance Minister (page 2 of 2)

Not to facilitate borrowing on the part of the country itself - and I want to stress that it is not the government's intention to borrow from the international market - but to make it easier and less expensive for the private sector in Saudi Arabia to borrow from inside or outside the country.

A sovereign rating will facilitate the process for private companies who, of course, can now apply for their own private ratings under the umbrella of the sovereign rating system, which will help them raise funds from both inside and outside the country.

Q. Bahrain is still the financial hub of the region, Dubai is developing projects to compete with Bahrain, and the major market is in Saudi Arabia, which is reforming. What does the future hold for the regional economy?

The future holds many positive things for Saudi Arabia. With the regulated capital market, the insurance law - bringing with it the development of the insurance industry - and the new tax law, we see Saudi Arabia's financial sector expanding tremendously in the future. We have also made calculated moves to encourage foreign banks to set up in the country.

With all these reforms that are now taking place, I can tell you with certainty that we will be there, we will be growing, we will still be a major market, and more business will be generated from inside Saudi Arabia.

Q. Do you see Riyadh or Jeddah becoming the financial hub for the region? And which will take the prime position?

They will both be major centers. I don't want to sound like we're competing with Dubai and Bahrain. I think all those centers, including Riyadh, Jeddah and Dammam, will be expanding in the future in line with the expansion of the region's economies and the new opportunities that come out of that.

Q. The Western media see the reform process in Saudi Arabia as being too slow. Others, especially at home, say that it is progressing well. How do you explain this difference - in the perception of the reform process - between outsiders and insiders?

A. Well, I would point out that I mentioned in a recent statement that we need to do more work on explaining exactly what we are doing in Saudi Arabia.

We are moving at a good pace. But it seems that we have not gotten that message across, that we have not done enough to let the international community know about what we are doing.

Maybe this interview will help. We'll be doing more interviews and issuing more statements on the pace of the reform process to help get the message out there to the international community and the international media.

Q. How can you get your point across to the international community that you have moved forward, that changes have taken place and that more changes are on the way? Will simply issuing statements get the message across?

A. Let me just go back a little bit and say that the companies that are dealing with Saudi Arabia directly, and that have done so for a very long time, know that we are moving forward. They can see proof of that on the ground.

But we do need to explain our position to those who are not familiar with the Saudi market. However, there is no doubt that major companies that are interested in the development of gas, industrial petrochemicals and water desalination know that we are moving forward.

Obviously, though, we want to inform those who are unaware of our reform program that we are determined to forge ahead with it.