India, Saudi Arabia crucial for global financial restructuring:PM

RIYADH - The role of emerging economies like India and Saudi Arabia would be crucial to the restructuring of the global economic and financial architecture, said Prime Minister Manmohan Singh.

The integration of our economies with the rest of the world has created new opportunities but also brought new challenges, the prime minister said Sunday while addressing the Council of Saudi Chambers of Commerce and Industry during the course of his historic visit to this affluent Gulf nation, one of the world’s largest oil producers and home to Islam’s holiest sites.

The global financial crisis has thrown up a broad agenda for global action and reforms. The role of emerging economies such as India and Saudi Arabia within the G-20 framework and otherwise will be crucial to the restructuring of the global economic and financial architecture, he added.

Stating that the robust growth of the economies of the two countries threw up immense opportunities for business communities from both sides, Manmohan Singh said Indian investments into the kingdom have risen considerably and today stood at more than $2 billion covering 500 joint ventures.

Several major Indian companies have already established their presence in the kingdom. Our public sector company RITES has recently won a contract to participate in the North-South Railways project (in Saudi Arabia). There is however potential for doing much more, he said.

The North-South Railway project is an ambitious plan to build a 2,200 km-long railway across some of the most inhospitable terrain in Saudi Arabia.

Stating that India’s needs for high quality modern infrastructure was vast, he called upon Saudi investors and entrepreneurs to explore investment opportunities in India.

I would specially refer to the construction, manufacturing, pharmaceuticals, health, agriculture, energy, telecommunications, biotechnology, tourism and other service sectors, the prime minister said.

From India’s side, he offered the country’s expertise in the knowledge-based sector.

Education and skill development are of primary importance to both our countries. India has a proven track record in the field of knowledge-based industries, which have great potential for the improving the skill set of the workforce, he said.

India would be happy to share her experience with Saudi Arabia in the area of human resources development.

As for energy cooperation, he said that conditions were ripe for moving beyond a traditional buyer-seller relationship to a comprehensive energy partnership.

Saudi Arabia is the largest supplier of crude oil to India meeting 30 percent of the latter’s needs.

Indian companies are well equipped to participate in upstream and downstream oil and gas sector projects in Saudi Arabia, he said.

Coming to the Indian economy, he said, despite the global financial crisis, we hope to achieve a growth rate of over 7 percent in the current financial year.

We expect to get back to the growth level of about 9 percent per annum within two years. Our domestic savings are high, and can support investment rates of as high as 38 percent of the gross domestic product, Manmohan Singh said.

The prime minister’s speech came following a series of meetings between a high-level Indian business delegation accompanying the prime minister and Saudi investors and entrepreneurs.

Prior to the prime minister’s address, Saudi and Indian businessmen participated in an open dialogue moderated by Fahd Al-Sultan, secretary general of the Council of Saudi Chambers of Commerce and Industry.

Stating that the Saudi private sector was keen to have economic ties with India, Al-Sultan sought multiple-entry visas for Saudi businessmen. We need Indian expertise to support our small and medium enterprises, he said.