yesterday discussed the economies of saudi arabia, qatar, kuwait and other countries. james smith described saudi arabia's effort to move away from an economy dependent on oil exports, this is an hour-long event. >> we have to press ahead so i'd like to reconvene our forum at this time. as you know we're still on our tight schedule with one hour remaining for our second panel. the same procedures will pertain for questions from the floor so please begin sending them up as the panelists give their opening remarks. moderating our second panel is the honorable allen larson. and we at the national u.s. arab chamber remember fondly his days as undersecretary of state to have commission and many years prior to that neba bureau where he was a u.s. trade and

international fair treatment for u.s. companies. so it's a particular pleasure to call on ambassador larson to moderate this panel. >> thank you very much, good afternoon, everyone. we're looking forward very much to this panel. we're going to be considering a set of challenges that, perhaps, paradoxically, are just as difficult and daunting in many ways as those of the economies in transition, which we just heard discussed in the previous panel. experience around the world has shown, sadly, that ample endowments of natural resources which should be a blessing for a national economic development, can, on occasion, be a curse. nations that are rich in natural resources need to figure out ways how to translate that potential wealth under the ground into enduring forms of

wealth above grounding that create high and rising standards of living. doing this experience has shown, requires serious effort to avoid the temptations of overconsumption. the temptations of poor investments in white-elephant projects and sometimes, just plain out corruption. more affirmatively, making this transition from hydrocarbons to a broader and more diversified economy requires an effort to make sensible, thoughtful investments in infrastructure, in education and in the creation of an entrepreneurial culture and a sound regulatory environment for business. i think this should be of really interesting set of discussions and i think what we'd like to do

it is begin the as we did last time. the far right end of the panel with some remarks by ambassador corbin. >> thank you very much, i'm michael corbin and i've been in the uae almost seven months and business has been my dop priority. i'd like to start off the panel by saring that the uae is very much opened for business. for two reasons. one, the uae has benefitted from the problems in the other arab countries as people are moving there as businesses is moving there and tourism is going there. but i would also argue that it's because the uae has positioned itself as a transit hub, as with the two major airlines with dubai's ports and airports, abu dhabi coming on line and the they are developing the end queen continent and things are developing. but i'd like to focus on the subject of this panel which is alternative energy. while the traditional areas of

by, aviation, defense, infrastructure, are moving ahead in uae, there was a pause but they're moving ahead and they are continuing in those areas. the world future energy summitt earlier this year provides an opportunity for u.s. companies to enter into a country where there is planning for the future. and what i see is the uae is a place where we can do real competition with the indians, the chinese and the turks in areas such as alternative energy. health care and education. the u.s. brand is extremely popular still. what we're facing is sometimes a 30% of the cost of our products and services when you look at india, china, turkey and other competitors. what we need to do and what i see in the u.s. companies who are willing to go to the united arab emirates, i see pursuing the potential in the country

with its young dynamic leadership with its vision for the region. as i said last year there was a slowdown in projects but the world future energy summitt, moving beyond traditional oil and gas, into areas like solar and other areas, offers a great potential for u.s. business. i see u.s. businesses, the small and medium companies coming to the uae and finding an atmosphere there that's very conducive to business for the region and beyond. as i said that transit hub. we've got almost 800 u.s. company there is already. there's more coming. we need to encourage more companies to come there and do battle with the indias and turkies and chinas of the world. we can can be successful because the u.s. brand name is still so popular if we can just beat our competition on price and we can when you look at things such as our follow-up service, our reputation and the way we do

business. and i'll stop there so that we don't run into too many ambassador talking for too long and leave it for questions and answers on the uae but we're very much opened for business and alternative energy is a great, great area which i can address more. >> saudi arabia is certainly the largest economy in many ways, the bellwether. ambassador smith, we look forward to you're comments. >> well let me start by agreeing that saudi arabia is opened for business. we've had a very successful three years. the combination of the state department, eb, policy efforts combined with the commercial service, this last year, we increased our nondefense exports to saudi arabia 20%. it's been double-digit growth in exports over the last three years. we increased our sports to saudi arabia 103% in the last year.

so big shift in the last two years, we've had 208 companies that have exported to saudi arabia for the very first time. 80% of those small and medium enterprises. those of you who have industrial waiting on the sidelines, get in touch and we'll connect you up. the focus today was diversifying a way away from hydrocarbons so here are stlee areas to core because you'll see a shift in that direction or, at least, the conventional way of looking at hydrocarbons. and in saudi arabia, the first issue is domestic consumption. make it a matter of policy never to do math in public, but saudi arabia uses domestically, about 20% of their oil in the wintertime. 30% in the summertime. they're domestic energy consumption is increasing about 10% a year so you do that for 20

years and you've got a problem. so that's the first issue they've got to deal with. you go from being part of opec to one time. which is the organization of petroleum, nonexporting companies. that's not where you want to be. the next issue is opportunity costs. if you consider the value of a barrel of petroleum, you realize that the current method of dealing with hydrocarbons as an exporter, doesn't make a lot of suns. if you drill a hole in the ground and pump out oil and sell it to somebody the value is about $100 a barrel. if you find it downstream it's worth about $300 a barrel and creates about 300 jobs that the first one does and it's been incredibly successful but at the end of the day you're putting natural resources in pellet or liquid form on a ship and

sending it halfway around the world for somebody else to make something with it. if you can take some of those derivatives and turn them into products that barrel of oil is worth about $1,000 a barrel to you and creates ten times the number of jobs that upstream does. if your problem is as it is in saudi arabia, jobs, jobs, jobs. 3 million people entering the workforce in the next decade and you have to consider diver diverseification of your economy. it makes no sense to use that oil and dump it into furnaces and charge people for their electric bill and 60 cents a gallon of gas when you could be using it more productively. it's opportunity cost. i'm not very sang wynn about how they'll move bubba it's the opportunity cost of using the

hydrocarbons for something that doesn't make sense. and the third, is the global market. where the global market is going. and i sayed that because i don't know where it's going. i refuse to predict but i know the current projections are probably wrong because three years ago everybody was talking peak oil today, nobody is talking about it. but over the last two years, the united states has shown a significant reduction -- i say "significant" but it's single digit. flat line to reduction in consumption. if that continues at the pace over a decade, say, we put a dent into the u.s. consumption and use that as the model for other people. then you have significantly changed the view of the global demand. if you add to that the

improvement non hydrocarbon, wind, solar nuclear, because the current projections still only call for about 15% of the global energy to be renewable by 2025. if that curve changes it makes a huge impact. and the third which is, again, an issue nobody talked about five years ago but everybody's talking about it today is shale oil and shale gas. if, in fact, our reserves are what some people are projecting and if you can overcome the challenges and then you can move to shift some of our economy away from oil into natural gas for any number of reasons, those re fundamentally shift the global demand curve. and i would argue thatey

come together, with the kind of technological tech lodge innovation that's possible. we could be in a different position than we are in today. >> if you have a question for any of the ambassador, please, write it down on the piece of paper and get the attention of an usher and we'll have an opportunity to pose those questions. now, ambassador, last time we talked it was in rihadh and now you're in dohadh and things our audience should keep in mind. >> thank you very much. as my two colleagues from saudi arabia and from the united states arab emirates said, the same thing is true for qatar. we're opened forbids and opened for business with a great interest on u.s. products, u.s.

products, u.s. services, u.s. technical know-how and opportunities for joint ventures and investments, both in qatar and both in investments in other parts of the world or the united states. qatar is the world's richest state per capita. it has the highest gdp in the world. it's also the world's leading supplier of liquified natural gas. in 2011 alone, qatar's gdp rose 20%. it is estimated in 2012 to rise at a slower rate, but still between 6 and 10%, which is a healthy rate by any standard but particularly in these economic times. and a lot on the drive of this is due to the amir of qatar who has developed a vision for his country over the last 15 years and has put forward a vision for

2030 with the development and a whole array of areas of human development, economic development, economic diversity, diver did diverse occasion and social development. and as part of his vision for 2030 a good part of that is the infrastructural development in the country and the diverseification of the economy that moves away from the simple upstream energy production that is the growth engine of the country. it's true, in the last five to seven years with the addition of new megatrains that have been developed in qatar, a has been joint production with american companies like exxonmobil and conokay phillips and exxon has invested more than $16 billion in qatar in the gas sector alone. that's fueled a lot of the wealth for the country but the leadership in the country, they understand that the wealth in

gas needs to be a diversify from upstream to downstream o'products. the petroleum chemicals and other related industries in the carbon sector. in fact, while qatar has just been producing 9.5 million tons per year in the petroleum chemical sector it hopes to reach 23 million tons by 2020. that's its goal. so, again, while not totally moving away from the hydrocarbon sector, but making sure that they are producing downstream products that increases the value chain for production and diversifies uses within their country and markets outside of qatar. linked to that is a way of looking at the country away from the carbon sector. how to make themselves the center for education, which they have done through the qatar foundation in education city where i'm proud to say education city hosts six major united

states' universities there with branch campuses providing education not just for qatar's university education, but for people of the region. even though we don't always think of education as an export, in qatar it is and it's a big export and it's contributing to the next general wrags of qatar students and workers. they're looking to the area of sports. they hosted the asian games in 2006. they just recently hosted the arab games this past december and january. and as many of you know, they have won the bid for the fifa world cup in 2022. this has meant that all of their interstructural development that was on board for vision 2030 has now been moved up by eight years to the year 2022. so let me just give you a little bit 06 overview of the major projects that are being undertaken in this regard

because this is an area in infrastructure where we, as a country, have tremendous capability. we have tremendous breadth. not just in program management but also, in the development of design and building e the ructure, training and airport that is being built. it is a $15 billion international airport. they have had the program management of this. it's due to be completed in 12-12-12, which is when the opening is going to be and there are going to be ancillary additional parts to the airport that will be built after the new international airport is built. this is area rife for u.s. businesses and expertise. there's a deep water seaport. $7 billion. that's being developed by the company, i believe, acom, as part of the project management and there will be more bids to

go in terms of the construction and all of the management of that project. $35 billion in rail projects. that's light rail, that's trabs, that's people-movers and metros. all of this needs to be constructed between now and 2020, to be able to accommodate all of the people coming in for the world cup and to be able to promote the business and transportation that is needed. the road networks this new project is going to be built, $20 billion. in the next few years. the water and electricity segment which needs to be expanded another $3 billion in the next six years. this is not even to mention all

of the work that they're doing in renewables as ambassador smith rightly pointed out. the issue of shale gas is going to revolutionize the whole region but qatar is now as the leading export of lng and continuing to develop its capability, is increasingly shifting its markets away from the u.s., still exporting to europe, i might add, the uk is almost singularly dependent on lng from qatar. but in shifting its visions towards the east, india, china, after the catastrophe that took place in japan recently. japan has now emerged as one of their inputers of l&g. they aare expanding in all area and diversifying in science, technology, renewables and

making a mark for themselves as a diversified economy with the energy segment not their only focus. >> thank you. >> let me just start by saying that just like our neighbors in the gulf, we also have a country which has growing economy. it has -- it very welcoming to international businesses and particularly, to the united states business. it has a lot of needs with a young population and they are looking to do -- looking to diversify their economy to ensure that beyond the area of hydrocarbons they'll have a well structured well-diversified economy. when we look at ohman, let me divide the kmer elements. one is ohman as a market and the

second is ohman as a platform. that's a very important way for businesses to engage in the region should look at o'oman. they are doing a lot of things. they have been very successful in not only maintaining but expanding their hydrocarbon reductions. they've turned that around and now they are generating record revenues and are using those revenues wisely to invest in the future and i'll get to that in a minute. one aspect of that, which, again, is another example of where american companies can play a very important role, is the single greatest contributor to oman's ability to turn around it's previously-declining petroleum production and they

went in and revitalized one of the main oil fields and increased production by over ten fold and that turned around their declining production so that's a very good example of an american company bringing in its technology but working closely with the aomanis. i visited recently. they are doing very well. the areas do emsicly for oman with it's not a large country in terms of population. there are about 2 million omanis. but they are looking to expand their economy in a number of areas. tourism is their highest priority but theirself also looking at services. certainly training franchising which has been mentioned but consultancy, they are very much looking for good consultants to support the projects that are

under way there. in terms of the structure of the market, they have a couple of specific advantages. one is we do have a free trade agreement with oman and more and more companies are leveraging that in order to be able to ace production there for the oman market and beyond because of the advantages that accrue through the free trade agreement. that sort of leads to the second element of oman's attractiveness. that's oman as a platform. if you look at the map, quickly one cease it has the great advantage of lying outside the gulf and outside the strait and oman is constantly leveraging that geographic location in order to make itself the preferred low chacations for companies producing and marketing into the gulf. so they're expanding the northern port and building a new

port in the middle of the country and expanding their transshipment hub. they are building airports and they will be tying into the railline that susan mentioned. so they're setting themselves up as a location where companies that want to produce or market anywhere into the gulf can do so very conveniently and safely by bringing their goods into or out of a port in oman and avoid having to go into the gulf itself. they set up free zones with all of these locations so that you can actually do your business without having to deal with local taxes. this have an excellent training event, young people were asking for more opportunities and employment and there was a significant ramp dab up in education and training. so they are training young omanis to be a viable workforce and they have a large number of young omanis that can be that

viable workforce. it does provide a lot of advantages there. as you know, they have very wise and very stable leadership. and i think they've used those elements that they've had such as the free trade agreement to modernize their commercial legal infrastructure in ways that also make them an attractive location for investment. most people find oman is a very welcoming country. people that live there enjoy living there so companieses like to put put their there in in order to work them elsewhere in the gulf bup to know they're in a safe, comfortable location which is what they find when they're in oman. i'll stop there to answer any questions. >> thank you very much. our last speaker, the ambassador of kuwait. >> thank you very much. i very much appreciate the opportunity to address this particular topic open diversifying away from hydrocarbons. traditionally, the american companies that know the kuwaiti

market best and have been most involved have been in the hydrocarbon sector in the defense field. they know kuwait well and have done well and their contributions and involvement have contributed immensely. but just as many kuwaitis recognize the future sustainability of their economy will depend on their ability to diversify and the health of our relationship will depend on our ability to take that same step and diversify u.s. private sector engagement in kuwait. one of the primary advantages of kuwait is a business and investment destination for u.s. firms the historically positive and very strong relationship between the two countries. could ykuwaitis recognize this regularly reach out to me to tell me they're interested in seeing more u.s. firms come to kuwait and invest in kuwait and operate there. as part of kuwait's experience

of the arab spring, discussions in the government and throughout society have begun to sharpen their focus on developing strategies for sustainable, economic growth. kuwait held parliamentary elections on february 2nd. in the runup, many candidates called on the government to jump-start large-scale development projects designed to diversify kuwait's economy outside of their dominant sectors of growth. in 2010, kuwait's parliament passed a five-year development plan with those specific aims in mind. implementation of the plan has not moved forward as many add hoped but progress is beginning to take shape. apart from the development, the infrastructure plan is likely to be "the" driver of economic development over the next five to ten years. the budget has reached $130 billion and it will fund 1,100 projects in a number of sectors

including education, health care, transportation, and information technology. in spite of the challenges of doing business in kuwait i believe the u.s. firms are well positioned to succeed in a number of these areas so i'll touch on a few opportunities that i see as particularly fruitful for u.s. companies in the fields of education, health care, telecommunications and information technology. on education, before the liberation in 1991, our countries enjoyed a remarkable educational history, largely due to the many, many kuwaitis in the late 1940s and early 1950s began to travel to the united states for their education. even today, still, thousands of kuwaiti students travel to the u.s. to pursue educational programs. beyond providing those educational opportunities for kuwaitis in the u.s., american businesses involved in all aspects of education will find new opportunities for potential involvement. the kuwaiti government plans to

invest over $8 billion to develop its education sector tore over the next five years. that strategy includes university expansion plans, building new educational facilities, training teachers and developing new curricula at all educational levels. in the field of health care, another area where u.s. expertise is facing demand growth, over the next five years, the ministry of health plans to upgrade and expand existing public hospitals as well as to build a number of new medical complexes. kuwaiti health officials have already expressed an interest in working with u.s. hospitals and medical schools on these projects. including in the areas of project management, health care consulting. human resource development. hospital administration, and technology transfers. kuwaiti's regularly expressed to me their preference for u.s. medical services and treatment. many are aware that the government in kuwait continues to sponsor medical treatment services abroad for around 12,000 kuwaiti nationals every year and the u.s. is aim