SAUDI BUSINESSMEN SEEK TO BOOST PRIVATE SECTOR
Top Saudi businessmen
discussing ways to bolster the kingdom's private sector at a
Chamber of Commerce conference here today called for finance to
be made available more easily for industrial projects.
    Saleh Kamel, a leading businessman and head of the
Jeddah-based Dallah group, said business needed more funding
and welcomed recent measures to encourage banks to step up
lending.
    But yesterday conference participants were publicly
reprimanded for not investing enough in the kingdom.
    Prince Khaled al-Faisal, governor of the Asir region
hosting the four-day conference, accused businessmen of showing
ingratitude at a time when the government had been prepared to
draw heavily on reserves to maintain spending and stimulate the
economy.
    Businessmen, for their part, argued today that the
kingdom's commercial banks were unwilling to take risks and
help finance industrial projects.
    Saleh Kamel, one of Saudi Arabia's leading businessmen and
head of the Jeddah-based Dallah group, told Reuters the general
economic outlook for trade and industry had improved.
    "We can be optimistic, the economy is looking brighter," he
said. But he also said businessmen needed more finance and
welcomed measures being taken to encourage banks to step up
lending.
    A committee at the Saudi Arabian Monetary Agency, the
kingdom's central bank, is now examining the problem.
    Commercial banks are in fact extremely liquid but have
become highly selective in extending new credit after many
companies ran into trouble repaying debt during the last three
years.
    Between 1982 and 1985 banks had to make risk provisions
totalling 4.3 billion riyals and results now coming in for 1986
show another year when heavy reserves had to be made against
bad and doubtful loans.
    The effects of the Middle East economic downturn hit the
construction sector in Saudi Arabia very hard and there has
been a sharp fall in development lending for new industrial
projects.
    The Saudi Industrial Development Fund, a major source for
private sector finance, made loan commitments totalling 752 mln
riyals in the financial year to September 4, 1986, a decline of
nearly 20 pct on the previous year.
    The government credit agency specialises in low cost loans
for development, funding 50 pct of a project's total value.
    The pattern of the agency's lending has also shown a
distinct shift away from infrastructre-related industry - such
as cement plants - to capital-intensive projects.
    Businessmen said opportunities are now available in service
industries and tourism which is slowly developing in the Gulf
region. But new investment in manufacturing industry shows
fewer signs of taking hold.
 REUTER
