Alwaleed answers Abdullah’s call to help poor

Prince Alwaleed ordered the construction of 10,000 homes to be built in different areas of Saudi Arabia over a period of 10 years making him the first in the kingdom to respond to a call by Crown Prince Abdullah to help the poor.

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By  Massoud Derhally Published  November 24, 2002

Responding to the call made by Saudi Crown Prince Abdullah to the well-off in Saudi Arabia to make donations to ease the suffering of the poor after his visit to the slums in an old district in Riyadh, Prince Alwaleed ordered the construction of 10,000 homes to be built in different areas of Saudi Arabia over a period of 10 years (1,000 homes per year) making him the first in the kingdom to respond.

In a letter sent to Crown Prince Abdullah, Prince Alwaleed announced his contribution and stressed his commitment that he would strive for the betterment of the citizens of Saudi Arabia by building the poor homes that are suitable for living conditions as soon as possible.

“Your inspection of impoverished neighbourhoods has revived the old tradition established by the Caliphs, to assume responsibility for the welfare of everyone in the community. We commend you for your good deeds and we congratulate the citizenry for such leadership,” Alwaleed said in his letter addressing Crown Prince Abdullah. “As you have stated, acknowledging a problem is the first step towards rectifying it. You have identified the malady, and if those in the government do not tend to it, it will worsen. Furthermore, as you have stated, what you have witnessed in Riyadh, undoubtedly exists in other parts of the country,” Alwaleed added.

Crown Prince Abdullah issued a directive, following a visit on Thursday (Nov. 21) to poor neighbourhoods of Riyadh, the Saudi capital, to combat poverty. Saudi Arabia, which once reported one the highest per capita incomes in the world ($18,000 in 1981), suffers from growing unemployment and mounting government debt.

Times are changing in the Kingdom. With the continued weakness in world oil prices demonstrating Saudi Arabia’s vulnerability to over-dependence on oil, efforts to diversify the economy’s production base are being stepped up, and new doors are being opened to foreign investors. The Saudi government intends to retire a portion of its debt by giving local lenders a share in unspecified companies. Among the companies exemplifying the potential for non-oil economic development is the Saudi Telecom Company (STC).

Thirty percent of industrial giant Saudi Basic Industries Corp (SABIC), the biggest petrochemicals firm in the Middle East, was floated on the Saudi exchange in 1984 by the Saudi government.

According to analysts and economists, privatisation will help alleviate economic burdens on the Kingdom, which is suffering from anaemic growth, a staggering US $170 billion in debt — equivalent to nearly 100% of gross domestic product (GDP) — and unemployment of an estimated 20%.

There is talk of levying a 10% income tax on the 6 million expatriates that live in the kingdom, while some jobs have been restricted to Saudi nationals in line with what has been dubbed as the Saudization policy.

In its latest report on Saudi Arabia, the Economist Intelligence Unit (EIU) forecasts that Saudi Arabia’s real economic growth in 2003 and 2004 will show a marked recovery as oil production increases. The EIU also predicts that a drop in the price of oil in 2004 will result in a current-account deficit that will increase the Kingdom’s fiscal deficit, while inflation will remain low.

Real economic growth in Saudi Arabia, according to the EIU, is estimated to reach 2.8% in 2003 and 3.9% in 2004, as oil production and export volumes increase. Falling oil prices in 2004, says the EIU, are forecast to turn a current account surplus next year of US$10.4 billion to a deficit of over US$3.5 billion in 2004. A minor fiscal surplus of a forecast 0.2% of GDP in 2003 is likely to be followed by a deficit of 4.4% of GDP in 2004.

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