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C O N F I D E N T I A L SECTION 01 OF 02 JEDDAH 000289 
 
SIPDIS 
 
SIPDIS 
 
RIYADH, PLEASE PASS TO DHAHRAN; DEPARTMENT FOR NEA/ARP; 
PARIS FOR ZEYA; LONDON FOR TSOU 
 
E.O. 12958: DECL: 04/04/2015 
TAGS: EAIR ECON KISL SA
SUBJECT: CORRECTION - BUSINESS COMMUNITY TABLE-TALK 
 
REF: A. JEDDAH 284 B. JEDDAH 103 
 
Classified By: Consul General Tatiana Gfoeller, for 
reasons 1.4 (b) and (d). 
 
¶1.  This is a corrected copy of reftel A. 
 
¶2.  C) SUMMARY  At a reception hosted by the American 
Businessmen of Jeddah (ABJ) held at the Consul General's 
Residence (CGR) on March 29, guests commented on a variety of 
topics relating to local business and economic conditions. 
In the wake of the recent public announcement that Saudi 
Arabian Airline's (Saudia) privatization plan had been 
approved by Saudi authorities, employees were already voicing 
concern for their jobs.  The recent sharp decline in the 
Saudi stock exchange was described as personally painful by 
some but heralded as an essential dose of reality by others. 
A major construction company expressed satisfaction with the 
economic outlook, and surprisingly, satisfaction with Saudi 
college graduates.  END SUMMARY. 
 
SAUDIA EMPLOYEES ALREADY WORRYING 
 
¶3.  (C) During a reception sponsored by the American 
Businessmen of Jeddah (ABJ) on March 29 at the CGR, Pol/Econ 
Chief met Dr. Osama A. H. Zahran who is responsible for all 
medical clearances for personnel at Saudi Arabian Airlines 
(Saudia).  When asked about employees' attitude toward the 
recently announced privatization plan for the airline, he 
indicated that employees were already anticipating job cuts. 
He speculated that the cuts would first affect the office 
staff, then the support staff, and finally the technical 
(among which he included his medical department) and flight 
personnel. 
 
EXPATS HURT BY MARKET REVERSE; OPTIMISTIC ABOUT DIRECT 
INVESTMENT 
 
¶4.  (C) Pol/Econ Chief spoke with an American employee of the 
Bin Laden Group who had been enthusiastic about his earnings 
in the stock market during an earlier meeting in late winter. 
 Now, he confessed, he had lost virtually all of his profits 
in the declining market over the last month.  He was 
chagrined, but maintained his optimism, now that expatriates 
would be allowed to invest directly.  He attributed much of 
his losses to the managers of the mutual funds, which had 
been the only avenue through which foreigners had been 
allowed to invest.  He surmised that they had not had much of 
an investment strategy and had just bought what was 
available.  He said he would feel better if he only had 
himself to blame for any future losses. 
 
MARKET DECLINE MAY TEACH SAUDIS A LESSON 
 
¶5.  (C) Another guest at the reception, Amcit Kamal M. 
Quadir, a financial advisor to companies preparing for IPO's, 
thought that the bear market could be beneficial because it 
would force the Saudi investors to face reality.  In his 
opinion, the sooner the investing public learned that there 
should be a sound financial basis for investment decisions 
the better.  He also felt that the market authorities and the 
government should do a better job of teaching potential 
investors about investing. 
 
¶6.  (C) He admitted that one of the greatest difficulties he 
experienced in advising companies about preparation for 
"going public" was the need for transparency and sound 
corporate governance.  He observed "it is difficult to 
explain to these companies that in dealing with the global 
financial environment, you can't just sit around the kitchen 
table and make a decision, or tell them (banks and investors) 
that grandfather made the decision and that's it."  He 
explains to them that decision-making must be 
institutionalized and experts consulted.  In his opinion, if 
Saudi companies fail to make the organizational transition, 
and adopt sound methods for corporate governance and 
transparency, they will not prosper. 
 
CONSTRUCTION COMPANY HAS DIFFICULTY HIRING ENOUGH ENGINEERS . 
. . 
 
¶7.  (C) Several executives from Turner Construction Company 
complained about the difficulty they face in hiring enough 
 
JEDDAH 00000289  002 OF 002 
 
 
experienced engineers and getting them into the country. 
Husein H. Odeh, the General Manager for Saudi operations, 
said that he simply could not find enough top engineers in 
the U.S. to fill all of his open positions, because of the 
restrictions on life in Saudi Arabia. 
 
. . . BUT HAS SUCCESSFULLY HIRED SOME SAUDI ENGINEERS 
 
¶8.  (C) When asked about the employability of Saudi-educated 
engineers, he said that they have been successful with a 
number of hires, but, he cautioned, they only hire new 
graduates who haven't "developed any bad habits yet."  He 
said the Saudi graduates are competent and if inculcated with 
the proper attitude by senior staff, have proven good 
employees. 
 
OTHER EMPLOYERS NOT PLEASED WITH SAUDI GRADUATES 
 
¶9.  (C) This experience is sharply at odds with what Pol/Econ 
Chief has heard from other senior corporate executives in 
recent weeks.  More typical were the comments of business 
executives attending the Jeddah Economic Forum a few weeks 
earlier.  At a dinner hosted by the Juffali Family for the 
Ambassador and Consul General, Pol/Econ Chief discussed the 
employability of young Saudis with the head of a 
pharmaceutical company.  The executive brusquely complained 
that Saudi youths were capable of doing the basic factory 
manufacturing tasks, but could not reliably be permitted to 
carry out product sales and support outside the factory.  In 
the executive's words:  "Lock them in the factory with a 
supervisor to watch their every step and anyone will do.  But 
we can't trust them to go out on the road and service the 
product."  Several other executives in the group chimed in 
with similar comments. 
 
ATTITUDE TOWARD TRAINING MAY BE THE DIFFERENCE 
 
¶10.  (C)  COMMENT.  Reconciling these contradictory opinions 
may be explained by the willingness to train the employee. 
Saudi companies seem to be unwilling or unable to provide the 
practical training that instills discipline, flexibility and 
initiative in workers.  This deficiency in their training 
system has at least been tacitly admitted by businessmen who 
constantly lobby post and American businesses for advanced 
training opportunities for Saudi workers (reftel). 
Coincidentally, this was demonstrated only a day after the 
pessimistic assessment at the Juffali dinner.  After the 
day's sessions at the Jeddah Economic Forum (JEF) the 
Ambassador and Pol/Econ Chief were dining on the patio at the 
Hilton Hotel with the Australian Ambassador and Commercial 
Officer, when the group was joined by three Saudi 
businessmen.  In the ensuing discussion, after disparaging 
the results of the Saudi educational system, the three 
businessmen pleaded with the Ambassadors to persuade American 
and Australian businesses to develop internships of a few 
weeks or months for young Saudis in order to teach them 
modern business practices and personal attitudes.  END 
COMMENT. 
 
Gfoeller