investment climate. the kingdom ’ s efforts towards economic reforms in order to attract foreign investment have come to fruition. according to a recent report of the united nations conference on trade and development ( unctad ), saudi arabia emerged as the largest recipient of foreign direct investment ( fdi ) in the arab world in 2006, attracting $ 18 billion in fdi, an increase of 51 percent over 2005. the global rating agencies standards & poors and fitch have also raised the sovereign credit ratings of the kingdom to a +. also, saudi arabia has been upgraded according to the world bank ’ s ease of doing business index from 38th place to 23rd place in 2007. the government has encouraged the establishment and growth of value - added industries in areas where the kingdom has competitive advantages, namely, cheaper energy, strategic locations and availability of raw materials. king abdullah has recently launched four megaeconomic cities in rabigh, hail, al - madinah and jazan, which are expected to draw almost sr 300 billion in investment and create more than a million jobs. it is worthy to note that these economic zones are located in the less developed cities and in areas away from the existing economically developed regions and are specifically selected to ensure that development and employment opportunities are spread around the kingdom. an important indicator of progress made in diversifying the economy is provided by the trend in our non - oil exports. such exports were insignificant in early eighties, but they have been rising sharply in recent years. since 2000, they have risen continuously. the non - oil sector exports were valued at about $ 21 billion in 2006 and constituted almost 6. 0 percent of total gdp and 13. 2 percent of non - oil gdp. during 2006, the national economy continued its remarkable growth for the fourth consecutive year, especially in the non - oil sector which grew by 6. 2 percent following its growth rate of 5. 2 percent in 2005. the non - oil industrial sector was the fastest growing sector of the economy recording a robust growth of 10. 1 percent during the preceding year. the sector has continued its robust growth during the current year. due to higher economic growth and receipt of higher than anticipated revenues, the fiscal position of the government has improved substantially in recent years. the budget surpluses since 2003 have enabled the government to reduce its domestic debt sharply and increase its expenditure on infrastructure and social sectors. the ratio of domestic debt to gdp has declined from 82 percent in 2003 to 27. 9 percent in 2006 which was reflected positively on

that of april 2010. 8. conclusion in conclusion, a supportive macro and regulatory environment is critical to attracting domestic and global sources of capital. saudi arabia has been going about this process for many years, backed up by a prudent monetary and fiscal track record. we welcome longterm capital inflows in various sectors of the economy to gain mutual benefits from the economic potential of saudi arabia. to promote this, the government has adopted an “ open door ” policy towards foreign capital which has provided excellent returns to fdi investors. saudi arabia has opened up the financial sector to foreign financial institutions by granting licenses to foreign commercial & investment banks as well as asset management & insurance companies to optimize the level of competence and coverage in different financial disciplines. in terms of regulation of financial institutions, we will continue with the prudent policy which has served us well in the past. as for the g20 agenda, the challenge is to transform its broad vision into detailed rules that prevent regulatory arbitrage of which banks took advantage of in the run up to the crisis. in closing, i am reminded of an old saying : “ money is a good servant but a bad master. ” in the last crisis, excesses in the financial system came close to driving the world economy into the abyss and a repeat of the depression of the 1930s ; and it is my belief that nobody wants to see that happen again. i wish you a productive and successful conference. thank you. bis central bankers ’ speeches