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Saudi Foreign Minister: Record deficit is 'manageable'

This modern green skyscraper in Bahrain is outfitted with wind turbines.
Alexander Hafernann | The Image Bank | Getty Images
This modern green skyscraper in Bahrain is outfitted with wind turbines.

Saudi Arabian Foreign Minister Adel al-Jubeir touted his country's economic prospects on Saturday, telling a conference that regulatory reform and freer markets were the key to growth and stability in spite of recent turbulence.

Addressing the 11th annual Manama Dialogue, a regional security summit hosted by the royal family of Bahrain, al-Jubeir downplayed concerns about the country's budget deficit, which recently hit a record. Earlier this year, Saudi Arabia to tap the capital markets with sovereign bonds for the first time in nearly a decade.

A recent report by the International Monetary Fund estimated that Saudi Arabia's public debt would hit 33 percent of gross domestic product (GDP) by 2020. The Saudi diplomat, however, appeared to dismiss those concerns.

"In Saudi Arabia we are at the tail end of huge infrastructure spending. Over the past 12 years we accumulated huge financial reserves," al-Jubeir said.

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Despite soaring public spending, "we have the lowest debt to GDP ratio of any Gulf country," he added. "We have a large population but our deficits this year are manageable."

He stated the Kingdom's move in January to streamline decision making under a new economic council - is already producing results. Meanwhile, Saudi Arabia is looking to invest its capital outside the country as it looks for bigger returns, in addition to boosting domestic opportunities in Saudi tourism and mining.

The conflict in Syria has put the spotlight on Middle Eastern government's cooperation with the West. As the U.S. moved to place a limited number of ground troops in Syria, al-Jubeir closed ranks with the U.S. Earlier this week, he told the BBC that the removal of Syrian ruler Bashar al-Assad was integral to resolving the crisis. He reiterated that on Saturday, adding that al-Assad should leave immediately.

Al-jubeir, a former Saudi Ambassador to the United States, said on Saturday that he feels cooperation from America and the West is the best it has ever been – despite the fact that for the first time in decades there is no US aircraft carrier currently stationed in the Gulf.

"The United States's commitment to our security is at an all-time high. It isn't measured by aircraft carriers," says Al-Jubeir.

He added the two big challenges for a second round of Vienna talks will be a timeline agreement for both an Assad departure, and the departure of foreign troops from Syrian soil.