Saudi can overcome the fall in oil prices, says expert
Saudis visit a local mall in Riyadh.
Abu Dhabi - The country started initialising policies of rationalisation of spending and diversifying the economy in view of the slump in oil price.
Saudi Arabia can overcome the fall in oil prices with its strong monetary reserve and low general debts level, said Mohammed Al Sabban, International Economic and Oil Consultant and Former Senior Adviser to the Minister of Petroleum of Saudi Arabia.
In a session themed 'Technology, Energy, and Economic Rebalancing', at the second Abu Dhabi Strategic Debate on Monday, Mohammed Al Sabban said the country started initialising policies of rationalisation of spending and diversifying the economy in view of the slump in oil price.
He, however, denied the fact that the fall in oil prices has something to do with the rise in investment volume in oil production.
Al Sabban said the GCC countries have started laying down solutions by rationalisation, lifting subsidies and going ahead with implementing value added tax (VAT).
Jeffrey Franks, Director of IMF Offices in Europe and Senior Resident Representative to the EU at IMF, tried to clarify the term 'insolvency of Saudi Arabia' used by his institution saying the IMF spoke about unsustainable policies of expenditure by Saudi Arabia because these policies may be causing Saudi Arabia huge financial burdens ranging between 15 to 18 per cent out of the Gross Domestic Product (GPD).
Franks expected the oil prices remain below $100 for years, which will pose many challenges at the level of planning, management of resources and diversification of the economy, and exercise control over the levels of spending and deficit.
Marat Terterov, Principal Coordinator of the Energy Charter Secretariat, EU, tackled the effect of modern technology of energy on world powers and balancing shifts.
The session also tackled Japan's growing tendency towards nuclear energy.
In this context, Shoichi Itoh, Manager, Senior Analyst at the Institute of Energy Economics, Japan, said that the nuclear energy will constitute 20% of Japan's energy basket by 2030. "That's why Japan wants to develop a peaceful nuclear programme as per the world's highest standards based on a frame of transparency and responsibility."