Saudi Arabian markets rose after the kingdom's ruler unveiled a $400 billion development and investment programme on Saturday, but officials and banking sources played down the plan, saying it is not new money.

The Saudi bourse, the Arab world's largest, was higher on Sunday and Monday after King Abdullah told leaders of the Group of 20 nations in a speech on Saturday that he expects "investment by the public and the state-controlled oil sector to exceed $400 billion over the next five years".

The ruler of the only Arab country represented at the summit said the spending would help the oil-based economy sustain growth in the face of the global crisis that has slashed oil prices by more than half in four months.

But a government source said nearly all the funds have already been budgeted over the past three to four years.

"They have already been budgeted," he said on condition of anonymity. "The king wanted to re-assure global markets that the crisis will not stop us from pushing forward with our development plans."     

Britain and other Western countries were hoping the world's largest oil exporter would offer extra funds to the International Monetary Fund (IMF) at the Washington meeting to help it battle the crisis.

But Finance Minister Ibrahim Al-Assaf quashed the speculation telling Reuters that Saudi Arabia had been a generous donor to international institutions but its reserves were for the kingdom's own development.

The slump in oil prices caused by the global finance crisis has put question marks over ambitious Saudi development plans in a country where, despite fabled wealth for some, most Saudis struggle to make ends meet amid the rising cost of living.

Saudi Arabia has the lowest GDP per capita of any country in the energy-rich Gulf Cooperation Council countries. It has the largest population at 25 million.

A senior banker also said the package is not new money. "Most of the funds have already been budgeted over the past three years," he said. "The money has already been outlayed for education, health, infrastructure, oil expansion capacity and new refineries although these (refineries) have not begun yet."         

Muhammed Younas Malick, senior economist at state-owned National Commercial Bank (NCB), the largest Saudi lender by assets, said the $400 billion announcement was a Saudi response to G20 expectations of additional funds from the IMF.

"The IMF has been looking for money from the Gulf and China ... They don't have adequate funds, they cannot give resources. This is my understanding," he said.

"The ($400 billion) funds have already been committed to projects within the kingdom." - Reuters