Minister of Finance and National Economy Dr. Ibrahim Al-Assaf yesterday addressed the 58th session of the Development Committee, an affiliate of the World Bank Group, and highlighted the importance of the measures recently endorsed by the IBRD and the International Monetary Fund (IMF) to promote cooperation between them, especially regarding integration of their efforts in resolving the financial crises facing a number of developing countries. Dr. Al-Assaf expressed the hope that these new measures would be consistent with consultations and programs being extended to developing countries by the Bank and by the Fund. Commenting on the increasing demands for the IBRD's resources in the light of emerging crises, he reiterated that Bank aid should focus on activities that are in harmony with its basic goals: to support countries in lowering their level of poverty, and to invest in development projects. He added that emergency assistance should be within the current abilities of the World Bank in order to safeguard its financial stability in serving developing countries.
Dr. Al-Assaf noted that recent economic crises had affected countries that depend on oil for their exports and on those developing countries which export basic commodities. He said the decline in oil prices had had a negative impact on the budgets of these countries, notably their foreign accounts, and consequently on their development programs and their role in supporting the global economy. He called on the World Bank and the IMF to play a more effective role in clarifying the importance of objective economic policies to increase growth in industrialized countries, which in turn, could support growth in developing countries. He welcomed the latest steps undertaken by the World Bank to extend the indebtedness of poorer countries until the end of the year 2000.
Earlier, Dr. Al-Assaf addressed the IMF’s Interim Committee and reiterated the strength of the Saudi financial system, saying: “In spite of the decline in oil prices and the crises faced by stock markets worldwide, the Saudi private sector has shown a steady growth.” He attributed this healthy condition to the effective role being played by the private sector as well as to the soundness of a financial system that has an environment characterized by stability and flexibility in trade and investment. Referring to the decline in oil prices as a financial challenge, he noted that this development has made Saudi officials resort to financial measures in the field of revenues and expenditures in a way that protects the Saudi economy from international economic fluctuations. Underscoring the importance of intensifying international efforts to prevent a recurrence of the financial crises, Dr. Al-Assaf pointed out that the adverse impact of the decline of oil prices was not confined to oil-exporting countries but affected the world economy as a whole. He went on to call for revitalization of those economies that have passed the stage of stagnation, notably those in South and East Asia.
During his visit to Washington DC, Dr. Al-Assaf met with the U.S. Deputy Secretary of Treasury, with whom he exchanged views on issues of mutual interest at a meeting attended by a number of senior Saudi officials including Governor of the Saudi Monetary Agency (SAMA) Hamad Al-Sayyari.