Accelerated transformation of Asia For more than five decades Asia has sustained high economic growth. More important, however, is the significant economic transformation that has occurred during this recent decade, in response to the changing domestic and international environment. Asia now and Asia previously is therefore significantly different. Asia today contributes about one third of world output and 28% of world trade. Asia’s progress and development has lifted millions out of poverty, creating extensive employment and improving living conditions with better education and healthcare opportunities. The economic transformation has essentially resulted in more diversified sources of growth for Asia. From being export-led, domestic demand has now become an increasingly important source of growth. This is also reinforced by the shift from the public sector to the private sector as the main driver of growth. While Asia is highly diverse, a common feature prevailing is the tremendous economic flexibility of the Asian economies. Institutional development, the large skilled workforce, the shift to greater market orientation and the general macroeconomic stability have allowed resources to continuously shift to new areas of comparative advantage and for the Asian economies to remain competitive. Being highly diverse, Asia has also been able to leverage on the complementarities that exist in the different economies. This has generated an expansion in intra-regional trade, intra-regional investment activities and an increase in financial linkages between the economies in Asia. The Asian financial crisis was a defining moment for Asia.
The infrastructure of the market is at a high level in terms of listing requirements, ongoing supervision, as well as settlement and custody arrangements. IPOs and capital raisings by local companies have been gaining pace, and this augurs well for corporate governance and operational efficiency. Government specialized credit institutions (such as the Public Investment Fund, the Real Estate Development Fund, the Saudi Industrial Development Fund, the Saudi Credit & Saving Bank and the Saudi Agricultural Development Fund) play an important role in providing long-term credit to productive sectors of the economy. Their outstanding loans as at the end of 2010 totalled SAR 178 billion. Moreover, government partnership in investments is an important factor in Saudi Arabia. For instance, the Saudi Electricity Company has a programme of public-private partnership projects in the power industry. The third source of local funds for businesses after banks and equity market should be corporate bonds. The corporate debt market is in the process of emerging, with outstanding corporate bonds to GDP at about 3%. The first corporate bond issue in Saudi Arabia took place in 2003 and in 2009 a corporate bond trading platform was launched. A number of bond issues have taken place, but so far no active secondary trading in debt has developed. Nevertheless, I am confident that this will develop in due course, both in conventional and sukuk form, as it has done in other markets. 4. Sources of finance: external  Businesses in Saudi Arabia also have access to external capital markets.