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The kingdom says it is faring better than most in the financial crisis, but some Saudis wonder.
“You need more information to diagnose and fix the problem,” he said. “What happens today is that everyone tells you everything is okay, that everything is dandy, but in fact it’s not.” Al Saud said he feared that “there will be lots of companies going under, the economy will shrink and go into recession, basically ... . It’s going to be the biggest economic crisis in this coming decade for Saudi Arabia.”
The prince, who has investments both at home and abroad, lamented that the Saudi stock market crashes of 2006 and 2008 had deprived the country’s middle class of much wealth, and that job creation remains slow.
Motashar Al Murshed, CEO of Al Inma Investment Bank in Riyadh, said he is concerned that, for political reasons, Saudi Arabia may not be able to tap its foreign reserves as needed if Washington requests that Riyadh forgo redeeming its U.S. treasury holdings until the United States is back on its economic feet.
“I’m worried we’ll be asked to renew these funds (when they reach their maturities), and that in the interest of the global economy, we’ll do that,” Al Murshed said in an interview.
Saudi Arabia is one of the larger holders of U.S. debt.
SAMA Governor Muhammad Al Jasser, who told an economic conference in Riyadh in January that there had been “a dismal failure of regulatory oversight” in the United States, this week expressed confidence in Washington’s efforts to revitalize its economy.
"We have confidence that the U.S. is throwing all available weapons at the financial situation to stabilize it," Al Jasser said at a conference in Bahrain.
He added that he has not yet seen anything to make him concerned about Saudi Arabia’s foreign assets, "but this is a crisis in motion."
Like Al Saud, the businessman, Al Murshed expressed concern about government assurances that all is well.
“I’m frightened because ... the people who manage the economy have raised our expectations so much by announcing this big budget (for 2009) and by repeating constantly that we have nothing to worry about in this global crisis,” he said.
He called it a form of denial when officials say the Saudi Arabia is “much better off than others,” because they are overlooking systemic problems and “focusing only on the surplus in U.S. treasury.”
The country’s rulers are “generous” in their budgetary allocations for services and projects, the banker added. But “handling these funds requires a very active and very efficient and focussed executive team.” And right now, “there are six to seven entities caring for the economy but they don’t coordinate with each other...What worries me is the inefficiency and lack of coordination.”