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UNCLAS SECTION 01 OF 02 JEDDAH 000103 
 
SIPDIS 
 
SIPDIS 
 
RIYADH, PLEASE PASS TO DHAHRAN; DEPARTMENT FOR NEA/ARPI; 
PARIS FOR ZEYA; LONDON FOR TSOU 
 
E.O. 12958: N/A 
TAGS: ECON KISL PREL SA
SUBJECT: WTO WILL BRING CHANGES.  IS SAUDI ARABIA READY? 
 
REF: 05JEDDAH04938 
 
LEAD SAUDI WTO NEGOTIATOR SPEAKS TO AMERICAN BUSINESS 
COMMUNITY ABOUT THE FUTURE 
 
¶1.  SUMMARY.  Lead Saudi WTO negotiator Fawaz Al-Alamy's 
warmly received speech to a group of American and Saudi 
businessmen exemplified the burgeoning interest in WTO in 
Saudi Arabia.  Contacts with foreign concerns have also 
exhibited rising interest in the effects WTO will have on 
business in Saudi Arabia.  However, some attending the above 
speech expressed reservations that Saudi Arabia would be able 
to compete in an open economy.  END SUMMARY. 
 
¶2.  On January 30, Fawaz Al-Alamy, Advisor to the Minister of 
Commerce and Industry and a lead negotiator on Saudi Arabia's 
accession to the WTO, spoke to the American Businessmen of 
Jeddah (ABJ).  Approximately 50 American and Saudi 
businessmen, including about six women, listened as Dr. 
Al-Alamy described at some length the principles of WTO, how 
they will affect the business climate in Saudi Arabia and the 
changes that must occur in the Saudi economic system.  He 
listed some of the 43 laws that have been promulgated by the 
Saudi government to comply with WTO and assured the audience 
that WTO principles protect Saudi culture.  Al-Alamy informed 
the audience that beneficial changes have already occurred 
and others will take place soon.  As examples, he described 
the opening of the finance, services and communications 
sectors, announcing that he expected two additional licenses 
for mobile phone service providers to be approved this year. 
The audience showed particular interest in Al-Alamy's 
assessment of the economic sectors that will benefit and 
those that will languish under WTO. 
 
SAUDI ARABIA IS INTERESTED IN WTO NOW 
 
¶3.  In contrast to earlier events involving the WTO which had 
been met with a complaisance bordering on indifference 
(reftel), this speech was followed with acute attention by 
the audience and succeeded by a flurry of questions that 
continued until the meeting was forcibly ended due to time 
constraints.  Even then, questioners privately bombarded Dr. 
Al-Alamy with additional queries. 
 
AMERICAN BUSINESSES ARE TAKING NOTE, TOO 
 
¶4.  Foreign business interests are also taking note of 
potential opportunities in Saudi Arabia.  A few days before 
the above speech, Pol/Econ Chief, received a call from an 
American attorney in Jeddah on behalf of an American 
management consultant client inquiring if WTO would 
facilitate their operations in Saudi Arabia.  Two months 
earlier, this attorney had confessed that none of their 
clients had shown any interest in Saudi Arabia's accession to 
WTO. On the evening prior to the speech, an employee of 
Arabian Inspection and Survey Company, an affiliate of 
Lloyd's of London, confided to Pol/Econ Chief his belief that 
Lloyds would be able to expand from its current work, limited 
to marine surveying, into the newly opened insurance sector. 
 
 
BUT SOME QUESTION IF SAUDI IS REALLY PREPARED 
 
¶5.  Although the speaker and the audience in general exuded 
optimism, at least two questioners expressed reservations. 
Leading Jeddah businessman, Amr Khashoggi, doubted that Saudi 
workers were prepared to compete in an open, international 
economy.  This concern is frequently voiced in opposition to 
the Saudiazation Law, the statutory requirement that 75% of 
the employees in every business must be Saudis.  It is widely 
acknowledged in the business community and tacitly accepted 
by the government that this is an impossible figure to 
achieve.  Saudi youth simply do not receive adequate 
practical and technical education.  As Khashoggi enunciated 
his position to Pol/Econ Chief:  "Saudi workers must be 
exportable.  They must be competitive with other workers.  I 
say go abroad, to any other country and get a job, and I will 
immediately hire you when you return." 
 
¶6.  Another prominent businessman, Wahid Binzagar, Chairman 
of Biet Binzagar Companies, accused the Saudi government 
itself of being an obstacle.  He asserted that the government 
makes announcements and promises, but does not pass the laws 
and create the institutions actually required to effect 
change. 
 
 
JEDDAH 00000103  002 OF 002 
 
 
¶7.  COMMENT:  In contrast to earlier occasions, the domestic 
and foreign business community is now focused on WTO with 
optimism, albeit with uncertainty for the short term.  Saudi 
Arabia has made many changes in its laws and attitudes, but a 
great deal remains to be done.  During the conversation, the 
Lloyd's employee hoped all the necessary reforms would be in 
place in "two or three years."  END COMMENT. 
Gfoeller