But we feel that the costs of delayed action may sometimes outweigh its benefits, as postponing the inevitable and failing to accept the changed reality will lead to additional unnecessary costs. One should not want to keep alive old structures that clearly cannot be sustainable in the changed world for longer than necessary. This is a waste of limited resources and reduces long-term productivity. There is a saying that “a crisis should not be wasted” – negative shocks to an economy should lead to productivity gains. Our experience shows that quick decision-making and decisive policy actions can shorten the period of uncertainty that also weighs on economic activity. People and entrepreneurs in countries with delayed reforms overreact, leading to a higher level of risk aversion than necessary. Overshooting in risk aversion results in lost jobs and postponed investments. BIS central bankers’ speeches  1  Estonia, for example, lost almost 20% of its GDP during the crisis. By now we have regained the pre-crisis level, contrary to many countries that preferred to delay the necessary reforms. Some of them still face years of decreasing economic output. In summary, I would like to stress that prolonged fiscal consolidation and structural reforms can lead to unnecessary costs to the society. Some countries have chosen to delay the pain and take only gradual steps with their structural reforms, but this has in fact resulted in a reduction of the overall economic activity to the extent that might be no less than the shortterm cost of a quicker adjustment.
Despite the increasing role of the non-oil sector in the national economy, particularly the role of the private sector, the oil sector is still the main driver of the national economy, where most of the country’s revenues and receipts of the balance of payments are coming  2  BIS central bankers’ speeches  from. Therefore, it is necessary to continue to work hard in order to diversify sources of income to ensure the sustainability of economic development in the long run and reduce the risks associated with relying on a single source of income. Third: Reduction of high domestic consumption of oil and gas, as figures indicate an annual average increase in domestic consumption of 7.3 percent over the past five years, which is high by any measure and not commensurate with the rate of growth in population and GDP. There is no doubt that the increase in domestic consumption of oil, in addition to being a drainage of resources that God has bestowed upon us, it limits the quantities available for export in the future. Thus, it is necessary to consider the reasons of the increase in domestic consumption of oil and gas to rationalize their consumption. Custodian of the Two Holy Mosques: As we are on the threshold of a new gracious budget, I pray for the Almighty Allah to preserve you as the leader of the march of this blessed and generous country. May Almighty Allah lead your steps to success. BIS central bankers’ speeches  3